Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the SPDR MSCI EAFE StrategicFactors ETF (QEFA) is a smart beta exchange traded fund launched on 06/04/2014.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $918.29 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the MSCI EAFE Factor Mix A-Series Index before fees and expenses.
The MSCI EAFE Factor Mix A-Series Index captures large and mid-cap representation across 22 developed market Europe, Australasia, and Far East countries and aims to represent the performance of value, low volatility, and quality factor strategies.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.30% for QEFA, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.99%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Novartis Ag Reg (NOVN) accounts for about 1.96% of total assets, followed by Asml Holding Nv (ASML) and Nestle Sa Reg (NESN).
Its top 10 holdings account for approximately 14.92% of QEFA's total assets under management.
Performance and Risk
The ETF return is roughly 18.94% and was up about 14.77% so far this year and in the past one year (as of 07/30/2025), respectively. QEFA has traded between $71.47 and $86.96 during this last 52-week period.
The fund has a beta of 0.74 and standard deviation of 14.62% for the trailing three-year period, which makes QEFA a medium risk choice in this particular space. With about 676 holdings, it effectively diversifies company-specific risk .
Alternatives
SPDR MSCI EAFE StrategicFactors ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
iShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index. iShares MSCI EAFE ETF has $64.24 billion in assets, iShares Core MSCI EAFE ETF has $143.92 billion. EFA has an expense ratio of 0.32% and IEFA changes 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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SPDR MSCI EAFE StrategicFactors ETF (QEFA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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