The advantages of indexing are considerable in large-cap, more efficient markets, while a well-chosen managed fund more often makes sense in less efficient and/or smaller-cap markets. The iShares MSCI Australia Index fund (EWA) seeks to provide a performance that generally tracks the publicly traded securities in the Australian market, as measured by the MSCI Australia Index. The fund is not hedged against currency moves. This ETF has a higher average market cap, and pretty much keeps its assets in the relatively larger and more liquid Australian market, while the actively managed Commonwealth Australia/New Zealand Fund has more in smaller-cap and New Zealand stocks.

The iShares MSCI Australia Index fund holds 71 stock positions, and is approximately market-cap weighted, with 55% of assets in the top 10 holdings. All of the stocks are based in Australia, but the fund inherently has significant exposure to New Zealand, partly due to the close trade ties between the countries. This ETF was established in March of 1996, and carries an expense ratio of 0.84%. Its total net assets as of October 3 were $74 million.