Why IEFA is a Smart Investment Choice This October

In the ever-evolving landscape of stock market performance, international equities are experiencing a renaissance that investors should take notice of, especially in October 2025. After a prolonged period of underwhelming performance compared to domestic counterparts, international stocks have regained their allure, and one of the most compelling options in this space is the iShares Core MSCI EAFE ETF (NYSEMKT: IEFA). With a remarkable return of 27.6% as of October 17, 2025, IEFA has outpaced the S&P 500, which has seen a more modest gain of 14.4% this year. For those contemplating their next investment move, here’s why IEFA stands out as an exceptional choice.

The Decade of Woe for International Stocks

The period from 2015 to 2024 was a challenging one for international stocks, characterized by stagnation and underperformance. Investors holding international equities experienced a significant disconnect from the rapid growth of the U.S. market. The MSCI EAFE Index, which serves as a benchmark for developed market stocks outside the United States and Canada, recorded a total return of just 66.9% over those ten years. While any positive return is better than a loss, this performance is dwarfed by the staggering 239.9% return posted by the S&P 500 during the same timeframe.

This stark contrast left many investors disillusioned, as they watched their international stock holdings lag behind their U.S. counterparts. However, market dynamics are cyclical, and the winds of change are now blowing favorably for international stocks.

IEFA's Strong Performance in 2025

As we move into the final months of 2025, IEFA has emerged as a top performer among international ETFs. Its impressive return of 27.6% this year is a testament to the renewed interest and momentum in international markets. This performance not only surpasses that of the S&P 500 but also suggests a shift in investor sentiment towards international equities.

Why is this happening? A few factors are in play:

• Global Economic Recovery: As economies around the world recover from the disruptions caused by the COVID-19 pandemic, many international markets are poised for growth. Countries in Europe and Asia are witnessing a resurgence in economic activity, leading to improved corporate earnings and investor confidence.
• Valuation Opportunities: After years of underperformance, many international stocks are trading at attractive valuations compared to their U.S. counterparts. This discrepancy creates an appealing entry point for investors looking to diversify their portfolios.
• Currency Tailwinds: The U.S. dollar's fluctuations can significantly impact international investments. A weaker dollar often boosts the returns on overseas investments when converted back into dollars, making international stocks more appealing.

Why Investors Should Consider IEFA Now

For those who might be hesitant about jumping into international stocks after a strong performance year, it’s essential to recognize that the rally is not merely a flash in the pan. Market leadership can shift, and the current momentum in international equities suggests that there is still room for growth.

Investing in IEFA offers numerous advantages for those looking to diversify their portfolios. Here are some reasons why now is the time to consider this ETF:

• Broad Exposure: IEFA provides investors with diversified exposure to a wide range of developed market stocks outside of North America. This includes large, mid, and small-cap companies, allowing investors to tap into various sectors and industries.
• Cost-Effective Investment: As an exchange-traded fund, IEFA offers a low expense ratio, making it an efficient way to gain exposure to international equities without incurring high fees associated with actively managed funds.
• Potential for Long-Term Growth: While past performance does not guarantee future results, the current economic landscape suggests that international stocks may continue to outperform in the coming years, especially as global recovery gathers pace.

Conclusion: Seize the Opportunity

In conclusion, the resurgence of international stocks in 2025 presents a compelling opportunity for investors, and the iShares Core MSCI EAFE ETF (IEFA) is at the forefront of this movement. With its robust performance, attractive valuations, and the potential for further growth, IEFA is an excellent addition to any diversified investment portfolio.

If you’ve been contemplating your next investment move, now is the time to consider stepping into the international equities space with IEFA. The historical underperformance of international stocks has created a situation ripe for potential gains, and with the current market dynamics, the opportunity may be too good to pass up.

As always, it’s crucial to conduct thorough research and consider your financial goals before making investment decisions. The path to financial success is not without risks, but with the right strategies and insights, investors can navigate the markets effectively.