SPY - EFA: World Equities In An ETF Box And Getting More Attractive

2024-01-25 08:16:26 ET

Summary

• U.S. equities have outperformed international developed market equities over the last 15 years, however, this trend may be reversing as international equities are showing signs of strength.
• International developed market equities should be part of investors' strategic asset allocation.
• EFA is a great way to get core exposure to large and mid-cap companies in Europe, Australia, and the Far East.

For years, international developed market equities have underperformed U.S. equities. Since the Great Financial Crisis, the S&P 500 has outperformed the MSCI EAFE, an approximately 15-year long period. However, this vast length of outperformance is a historical abnormality, and will change at some point. When is anyone's guess. But for those who believe in valuation and patience, a comeback for the iShares MSCI EAFE ETF ( EFA ) versus the SPDR® S&P 500 ETF Trust ( SPY ) is likely sooner rather than later....

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