EAFE stands for Europe, Australasia, and the Far East. It is an acronym commonly used in finance and investment to refer to a specific region or investment market.
EAFE is often used to categorize international or global investment portfolios that include stocks and securities from countries in Europe, Australia, and the Far East, excluding the United States and Canada. These portfolios are designed to provide investors with exposure to these regions' economic growth, market performance, and industries.
The selection of countries included in the EAFE region may vary depending on the context or investment strategy. Typically, it includes major developed economies such as Germany, France, the United Kingdom, Japan, Australia, and other countries in Europe and the Asia-Pacific region. These countries represent significant portions of the global economy and financial markets.
Through using the EAFE index or EAFE investments, investors seek to diversify their portfolios geographically, reduce risk, and potentially capture opportunities in international markets. The performance of EAFE portfolios is often measured using regional indices like the MSCI EAFE Index, which tracks equity performance in developed countries outside of North America.
Overall, EAFE is a widely recognized term in finance and investment that represents a specific region encompassing Europe, Australasia, and the Far East and serves as a reference for international investment and market analysis.
