2024-07-21 22:00:20 ET
Summary
- iShares MSCI EAFE ETF tracks large- and mid-cap companies outside the US and Canada.
- EFA has underperformed the SPY in 2024 and over a three-year time frame.
- This has resulted in EFA trading at a higher earnings and dividend yield compared to SPY.
- The US Dollar Index appreciated over the past three years, with a Fed policy pivot likely diminishing the attractiveness of the carry trade strategy.
- Key risks to consider are a high allocation to financials, outsized exposure to Japan, and potentially lower earnings growth.
Introduction
The iShares MSCI EAFE ETF ( EFA ) has underperformed the SPDR S&P 500 ETF ( SPY ) so far in 2024, delivering a mid-single-digit total return against the circa 16% gain in the benchmark ETF:
Read the full article on Seeking Alpha
For further details see:
EFA: Cheaper Valuations And A Weaker Dollar May Help