Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the State Street 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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. QEFA has been able to amass assets over $1.08 billion, making it one of the average sized ETFs in the Broad Developed World ETFs. QEFA 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
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.
Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.
QEFA's 12-month trailing dividend yield is 2.70%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Asml Holding Nv (ASML) accounts for about 2.24% of total assets, followed by Novartis Ag Reg (NOVN) and Roche Holding Ag (ROP).
Its top 10 holdings account for approximately 14.86% of QEFA's total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR MSCI EAFE StrategicFactors ETF return is roughly 13.46% so far, and is up roughly 20.27% over the last 12 months (as of 08/14/2026). QEFA has traded between $85.90 $101.60 in this past 52-week period.
QEFA has a beta of 0.68 and standard deviation of 13.15% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 662 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR MSCI EAFE StrategicFactors ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $80.33 billion in assets, iShares Core MSCI EAFE ETF has $196.2 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.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
State Street SPDR MSCI EAFE StrategicFactors ETF (QEFA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
