iShares MSCI EAFE ETF

EFA

Market cap $77.3B

Contrary to what some Trump officials believe, Europe remains critical to our defense and, indeed, to securing the Free World. Therefore, the sudden, unexpected cancellation of a U.S. Army armor brigade's deployment in Poland raises a deeply disturbing question: Is Washington retreating from Europe?

American investors have a home-country problem. Roughly 60% of global market capitalization sits in U.S.

Income investors holding iShares MSCI Europe Financials ETF (NASDAQ:EUFN | EUFN Price Prediction) are sitting on a fund that has done two things at once: handed them a roughly 3.5% yield and delivered a 28% one-year return.

South Korea's stock market is on a historic run, but ETF investors piling into the rally may be making a far narrower bet than they realize.

The United States is two months into its most consequential military operation since Iraq. Oil prices have surged more than 55%, and the IMF has cut its global growth forecast.

International developed-market equities have outperformed US large caps through the first four months of 2026.

The Nasdaq 100 is down more than 6% year-to-date. Meanwhile, the broad international developed market benchmark has held up far better.

For as long as most of us can remember, the conversation around international diversification went roughly the same way.

I reiterate a "Buy" rating on iShares MSCI EAFE ETF due to attractive valuation and technical support after a recent 9.3% pullback. EFA trades at a 16.7x P/E, over 4 turns cheaper than the S&P 500, with a PEG below 1.9x and a 3.31% dividend yield. The portfolio tilts toward developed ex-U.S. large caps, value, and financials, with limited Energy exposure; seasonality trends are bullish into May.

Over the last year, we have seen a significant divergence in performance between two key global equity markets, as international equities outperformed US equities. This marked a notable shift from the prior decade, during which US stock market indices consistently outperformed most global markets, particularly developed international equities represented by EAFE (Europe, Australasia, and the Far East).