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International Benchmarks

One way to measure the success of an international stock, mutual fund or (ETF) exchange-traded fund is to compare it to an index. Or, to keep expense ratios low, you might choose investments that simply track an index. Morgan Stanley Capital International Inc. (MSCI) is the leading provider of international indices.

The MSCI EAFE Index, which has outperformed the S&P by about 1% per year over the last 10 years, tracks the stocks in 21 countries in Europe, Asian and Australian countries, but not in the U.S. or Canada. As of June 2005, almost 25% of its assets were invested in stocks in the U.K., 21% in Japan, 9% in France stocks, nearly 7% in Germany, 7% in Switzerland, and just under 6% in Australia.

For those investors who like the low expense ratios of index investing, Vanguard Developed Markets Index fund, VDMIX, tracks this index. The iShares MSCI EAFE Index Fund with the symbol EFA tracks it as well.

The MSCI World Index is made up of stocks from 23 developed countries, including the U.S. and Canada. The MSCI Emerging Markets Global Index is comprised of stocks from various developing countries around the globe. 

Your new info features are a great idea, Ruth! I assume they are prepackaged for you by sponsors? Nice and succinct. Nice variety. I liked the international investing one.

Thaks, Tom. I’m glad you like the new features. I should point out, however, that nothing here is prepackaged. I read a lot of newspapers and spend a lot of time on the Internet. The posts you see are condensed from various sources. My goal is to make complex ideas clear and concise.