Launched on 06/04/2014, the SPDR MSCI EAFE StrategicFactors ETF (QEFA) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by State Street Investment Management, and has been able to amass over $943.48 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the MSCI EAFE Factor Mix A-Series Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.30% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.85%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Novartis Ag Reg (NOVN) accounts for about 1.93% of the fund's total assets, followed by Asml Holding Nv (ASML) and Astrazeneca Plc (AZN).
Its top 10 holdings account for approximately 14.33% of QEFA's total assets under management.
Performance and Risk
The ETF has gained about 24.41% and is up about 13.91% so far this year and in the past one year (as of 10/02/2025), respectively. QEFA has traded between $71.47 and $88.62 during this last 52-week period.
The ETF has a beta of 0.76 and standard deviation of 14.03% for the trailing three-year period, making it a medium risk choice in the space. With about 669 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 $67.93 billion in assets, iShares Core MSCI EAFE ETF has $156.5 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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