MSCI EAFE Index
An index that provides access to developed markets outside the United States
MSCI EAFE is a widely recognized international equities index consisting of large companies across developed countries in Europe, Australasia and the Far East, excluding the U.S. and Canada. MSCI EAFE includes equities across a range of industries and regions, providing broad opportunities for growth.
An international approach
Equities from the United Kingdom, Japan, France and Germany account for more than 60% of the Index. Individual companies represented include Nestle, Toyota Motor Corp and Bayer — companies with a strong historical track record of positive returns. MSCI EAFE includes ten market sectors including financials, health care and energy.
The international market growth opportunity
The United States represents only 40% of the total global stock market.2 The remaining 60% of the world’s equities are traded on markets in Paris, London, Berlin, Singapore and beyond. In an increasingly global economy, international markets may provide substantial growth opportunities. In fact, the World Bank forecasts world economic growth to exceed the growth in the United States in each of the next three years.3
A wide-reaching international equities index
MSCI EAFE is the oldest international equities index and includes a selection of stocks from 21 countries. MSCI EAFE tracks stocks from these developed markets, providing the opportunity to participate in returns from international companies while limiting exposure to emerging markets.4 The index is reviewed quarterly to reflect changes in the international equities market.5
MSCI EAFE developed markets countries7
Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom
For more information about MSCI EAFE, please visit www.msci.com/eafe
Chart assumptions: Index growth from 12/31/2008 – 12/31/2018. Calendar year-end returns are the percentage change between the closing price on December 31 of the year noted and December 31 of the prior year. Past performance is not an indicator or guarantee of future performance.
Last 10 years of MSCI EAFE Index performance
MSCI EAFE provides an international equities opportunity with nearly 30 years of live history. Domestic indices such as the S&P 500® Index exclude international equities markets and a majority of the world’s equities. The graph below illustrates how MSCI EAFE and the S&P 500® Price Index have performed over the last 10 years.
With the international economy projected to outperform the United States over the next several years, MSCI EAFE may capture a portion of that growth and could provide an opportunity to harness that potential.3
1 Source: MSCI. MSCI EAFE is one of MSCI’s oldest indexes, dating back to 1969. MSCI EAFE’s long history makes it one of the most benchmarked indexes of international equities.
2 Source: Bloomberg Market Cap Indices.
3 Source: World Bank, Global Economic Prospects, January 2019. MSCI EAFE is designed to represent the performance of large and mid-cap securities across 21 developed markets excluding the U.S. and Canada. A portion of the world GDP could include emerging markets, which are countries in the process of rapid development with less mature markets and regulations, as well as the developed markets tracked by MSCI EAFE.
4 Limiting exposure to emerging markets may reduce potential volatility but may also reduce potential short-term returns of emerging markets countries experiencing rapid growth.
5 Semi-annual index reviews in May and November rebalance the index and establish the large and mid capitalization cutoffs.
6 Source: MSCI Indexes.
7 As of January 2018. Developed markets are advanced economies with strong institutions and high levels of per capita income.
This web page was designed to provide information on MSCI EAFE and should be used in conjunction with the Nationwide New Heights Fixed Indexed Annuity materials. It does not describe the New Heights product or historical crediting rates of the product. For more information on New Heights, please ask your financial professional for a product brochure. Fixed indexed annuities are not an investment and do not directly invest in the stock market or any index.
International investing could involve risk such as currency, economic, geographical, political, and differences in accounting standards.
MSCI EAFE is unmanaged and cannot be invested into directly, and past performance is not indicative of future results. International investing could involve risk such as currency, economic, geographic, political and differences in accounting standards.
This material is not a recommendation to buy, sell, hold, or rollover any asset, adopt a financial strategy or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Clients should work with their financial professional to discuss their specific situation.
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Although MSCI shall obtain information for inclusion in or for use in the calculation of the MSCI indexes from sources that MSCI considers reliable, none of the MSCI parties warrants or guarantees the originality, accuracy and/or the completeness of any MSCI index or any data included therein. None of the MSCI parties makes any warranty, express or implied, as to results to be obtained by the issuer of the product, owners of the fund, or any other person or entity, from the use of any MSCI index or any data included therein. None of the MSCI parties shall have any liability for any errors, omissions or interruptions of or in connection with any MSCI index or any data included therein. Further, none of the MSCI parties makes any express or implied warranties of any kind, and the MSCI parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to each MSCI index and any data included therein. Without limiting any of the foregoing, in no event shall any of the MSCI parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
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