Top Ten Countries in the MSCI EAFE Index (as of 3/31/17)
Chart of the Week for April 21, 2017 - April 27, 2017
The Morgan Stanley Capital International ("MSCI") Europe, Australasia, and Far East Index ("EAFE") is a benchmark commonly used to measure non-U.S. developed country stock market performance and the MSCI Emerging Markets ("EM") Index is a benchmark commonly used to measure non-U.S. emerging country stock market performance. Each index consists of about twenty countries and a country cannot be a member of both benchmarks. The bar chart above shows the net performance in U.S. dollars for the one-year periods ended March 31, 2017 ("current" period) and March 31, 2016 ("prior" period) for the MSCI EM Index, the MSCI EAFE Index, and the top 10 non-U.S. developed countries. The top 10 countries were determined by their market capitalization in the MSCI EAFE Index as of March 31, 2017. The country with the largest market capitalization (Japan) is listed first, and the country with the smallest market capitalization of the ten countries reported (Sweden) is listed last.
All countries and indexes had positive performance in the current period, compared to all negative performance in the prior period. From the perspective of a U.S. dollar-based investor, the EAFE Index rose 11.67% in the current period (dark blue bars above), in contrast with a loss of -8.27% in the prior period (lighter blue bars above). In the current period the highest return countries shown include Australia (21.14%), Spain (18.44%), Hong Kong (16.62%), and Japan (14.44%). Global factors contributing to the current period positive returns included strong corporate earnings growth and improving economic data in Europe and Japan.
The EM Index rose 17.22% in the current period, compared with a negative return of -12.03% in the prior period. Current period returns were helped by better economic data from China, and higher prices for industrial metals and raw materials that helped many resource exporting Emerging Market countries. Stocks in Taiwan and South Korea were helped by strong exports of microchips to smartphone manufacturers in the current period.
No one can be certain in which direction individual countries or entire markets will move in the future, as past trends are no guarantee of future results. It is important to understand the principles of domestic and international markets and diversification before investing.
Posted by: sarah_oz@yahoo.com
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