BACKGROUNDER: EAFE INDEX

The MSCI EAFE index is an international equity index which represents 21 countries in developed markets outside North America (EAFA stands for Europe, Australasia and the Far East). Japan and the UK comprise nearly 50% of the index (see table of country weights below). EAFE has been around since 1969, has an average yearly return of 10.97%, and has a standard deviation of 21.40% - making it quite volatile.

Canadian investors can hold EAFE in their portfolios through funds such as XIN or TD's International Index.