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Set Sail with the Biggest Overseas Fund

Today‚??s ETF is the third-largest ETF on the market and the most popular way to invest overseas: iShares MSCI EAFE ETF (EFA).

In the last two weeks, we have discussed SPY and IVV, the two largest exchange-traded funds (ETF), both focused on the U.S. domestic market. The fund featured in this week‚??s ETF Talk takes an opposite tack with its focus on non-U.S. markets. Today‚??s ETF is the third-largest ETF on the market and the most popular way to invest overseas: iShares MSCI EAFE ETF (EFA).

This fund tracks the results of an index composed of large- and mid-capitalization developed market equities outside the United States and Canada. This allows investors to get broad exposure to a number of sectors and companies simultaneously.

EFA had a rough 2014 alongside battered global markets, falling 9.33%. However, it has a gain so far in 2015 of 1.43%. The fund manages a total of $53 billion. Its holdings match the index it tracks closely, including weightings. In addition, EFA offers investors a dividend yield of 3.69%, and it has an expense ratio of just 0.33%.


The holdings of this fund are widely distributed because of its generalist investment philosophy. It allocates the greatest portions of its portfolio to financial services, 25.44%; industrials, 12.58%; and consumer discretionary, 12.46%. EFA has 12.9% of its assets in its largest 10 positions. Among these are Nestlé S.A. (NSRGF), 1.97%; Novartis AG (NVSEF), 1.81%; Roche Holding AG (RHHVF), 1.62%; Toyota Motor Corporation (TOYOF), 1.40%; and HSBC Holdings Plc (HSBC), 1.40%.

For investors interested in a general investment in markets outside of the United States, there are a number of ways to do so, and many investors go with iShares MSCI EAFE ETF (EFA), the biggest ETF player in the overseas market.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about a giant S&P 500 ETF. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert‚??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.