Top Ten Countries in the MSCI EAFE Index

Chart of the Week for July 18, 2008 - July 24, 2008

The Morgan Stanley Capital International (MSCI) Europe, Australasia, and the Far East (EAFE) Index is a representative benchmark used to measure developed country, international equity, stock market performance. The graph above shows the performance in U.S. Dollars of the top 10 countries by weighting in the index as of June 30, 2008, with the United Kingdom having the highest weighting, Japan having the second highest, and so forth. Also included is the gross return of the MSCI Emerging Markets Index, which measures the equity stock market performance of 25 emerging market countries.

The overall MSCI EAFE index returned -10.15% for the one year ended June 30, 2008, but for the one year ended June 30, 2007 the overall index returned 27.54%. The MSCI Emerging Markets Index returned 4.89% and 45.45%, respectively. The volatility of investor returns are apparent as the year-over-year return differences were -37.68% for MSCI EAFE and -40.56% for MSCI Emerging Markets.

Turning to the MSCI EAFE Index components, all the top ten countries returned less for the year ended June 30, 2008 than for the year ended June 30, 2007 and all of the ten countries were in negative territory over the last twelve months. This decline reflects the weak global equity market conditions experienced in December 2007, January 2008, and June 2008. Even the modest gain in the MSCI Emerging Market Index over the last twelve months reflects a sharp decline in January 2008 and June 2008.

No one can be certain what direction individual country market will move in the future, as past trends are no guarantee of future results. It is important for investors to keep a long term focus, remain diversified, and not chase performance on the way up or down.

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 Investor Services at 800-669-7400.