Top Ten Countries in the MSCI EAFE Index

Chart of the Week for October 16 - 22, 2009

The Morgan Stanley Capital International ("MSCI") Europe, Australasia, and Far East Index ("EAFE") is a benchmark commonly used to measure non-U.S. developed country stock market performance. The bar chart above shows the net performance in U.S. dollars of the top 10 countries by weighting in the index as of September 30, 2009, with the country with the highest weight (Japan) listed first, and the country with the lowest weight (Sweden) listed last. The net return of the MSCI Emerging Markets Index is also included. This index measures the equity stock market performance of 22 emerging market countries, which are not included in the MSCI EAFE Index.

The winds appear to have changed for international investors so far in 2009. Only three of the stock markets in the top ten MSCI EAFE countries declined during the 12 months ended September 30, 2009: Japan, the United Kingdom, and Germany. Returns have been positive in each of the ten countries, as well as both of the broad indices, on a year-to-date ("YTD") basis. This is a welcome change from 2008, when the top ten EAFE countries had atrocious declines of at least 30% across the board. Australia, for example, has gone from worst performer last year to the best performer so far this year. During calendar year 2008, its stock market fell 51%; YTD as of September 30, 2009, its equity markets have jumped up 68%.

No one can be certain which direction individual countries or entire markets will move in the future, as past trends are no guarantee of future results. It is important to understand the principles of domestic and international investing before establishing a personal investment strategy because investing strategies vary and are dependent upon individual goals.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.

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The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.