An Index As Big as S&P's

note: the MSCI EAFE index is the gold standard in index investing with an estimated $3 trillion indexed to it. This is the index international funds (that are based in US) watch for relative performance (just as S&P's are the benchmark for domestic funds).

This is the rationale for the EAFE index as an important barometer. I have noticed how the S&P's and this index have an interesting relationship that tends to get resolved with one playing catch-up to the other. These indices are highly correlated on longer-timeframes due to globalization. Attached chart shows a breakdown of the worlds total market value by country. The red box is what is included in the EAFE (symbol EFA) -- note that this index has as much market value within it as the entire US market does -- so this is the ultimate in global coverage. The US and EAFE together make up ~85% of the worlds total market value.