iShares MSCI EAFE Growth ETF

EFG

Market cap $11.4B

It's October, and ETFs are closing in on the $1 trillion mark for net inflows in 2025 (We have $997 billion as of October 9). This is a monumental achievement given this milestone was first crossed in a calendar year only last December.

Growth stocks can offer investors an exciting ride, but that ride can be wild (and scary) at times. Younger, faster-growing companies tend to produce higher investment returns but are often riskier.

iShares MSCI EAFE Growth ETF offers exposure to 351 growth equities from developed markets, with a focus on large-cap stocks in industrials and technology sectors. The fund's expense ratio is 0.36%, slightly higher than iShares MSCI EAFE ETF, and it follows a market-cap-weighted strategy for stock selection. EFG has underperformed the S&P 500 due to lower technology exposure, making it suitable for international diversification rather than a core holding.

Active ETF supply and demand has accelerated in 2024. We believe a new active product from iShares is one to watch.

iShares MSCI EAFE Growth ETF holds over 300 international stocks with fundamental growth characteristics. EFG is diversified across a number of countries and sectors, with a focus on Japan and industrials. EFG has outperformed its parent index since inception, but it has been average over the last 7 years compared to other factor-based ETFs in the same stock universe.

Heading into a seasonally weak period can be cause for reviewing ETF exposures. Indeed, last week, the BlackRock Target Allocation Team, which runs model portfolios followed by many advisors, did just that.

Overall, ETFs pulled in $10.4 billion in capital last week, pushing the year-to-date inflows to $324.7 billion.

Overall, ETFs pulled in $12.8 billion in capital last week, pushing the year-to-date inflows to $324.7 billion.

The BlackRock Target Allocation Team, which runs model portfolios followed by many advisors, turned even more bullish this week. Indeed, the current allocation to stocks is the highest it has been since 2021.

International stocks look more appealing relative to the US. EFG provides each access to a growth tilted portfolio of developed equities overseas. Outperformance potential looks real and early.