This is a passive ETF that tracks an index based on the MSCI EAFE Index, excluding companies that hold fossil fuel reserves, and invests in developed-market stocks outside the US. It screens out companies with coal, oil and natural gas reserves and diversifies across overseas developed-market equities.

It suits investors who want to reduce fossil fuel exposure while diversifying across developed-market stocks outside the US.

It is an ETF managed by State Street using a passive (index-tracking) approach.

Based on the MSCI EAFE Index, the fund excludes companies with coal, oil and natural gas reserves and invests in developed-market stocks outside the US. By screening out companies that hold fossil fuel reserves, it reduces carbon-related exposure, and it spreads investments across overseas developed-market stocks in many countries and industries, providing exclusion-based international exposure.

• Excludes companies with fossil fuel reserves
• Diversifies across developed-market stocks outside the US

Assets under management (AUM) stand at $487.1M, and the expense ratio is 0.20% per year.

Compared with general international developed-market equity ETFs such as FNDF and GSIE, the fossil fuel exclusion criteria and the holdings composition are the main points of comparison.

Overseas developed-market stocks move with global risk appetite, the strength or weakness of the dollar and each country's economy. Because the fossil fuel exclusion structure reduces the energy sector weighting, its sector composition and performance can diverge from the standard EAFE index. With a large overseas weighting, currency fluctuations also affect performance.

Fund flows into overseas equities shift with global risk appetite and currency trends, and when interest in reducing carbon exposure rises, money sometimes moves into related product groups. It is also worth watching how performance varies with each country's economy and currency factors.

Reduced fossil fuel exposure and international diversification are its strengths, while tracking differences from the exclusions, currency movements and regional economic risk are considerations.

For broad developed-market exposure without fossil fuel exclusion, direct substitutes include EFA and VEA, and for broader sustainability criteria, international ESG ETFs such as ESGD are also worth comparing. The three products shown in the table, FNDF, GSIE and IGF, differ in screening criteria and exposure, covering international fundamental and factor stocks and global infrastructure respectively. This ETF's distinguishing feature is its developed-market exposure that excludes companies with fossil fuel reserves.

Here are the points to review before investing in EFAX. The fossil fuel exclusion is appealing, but tracking difference, currency and regional economic risks need to be checked in advance. It is also advisable to compare it with broad international developed-market and ESG products.

Tracking difference from the energy sector exclusion, currency fluctuations and slowing economies in individual countries are the main drivers of short-term performance, and the fossil fuel exclusion can make the sector composition differ from the standard EAFE index. With a large overseas weighting, currency movements also affect returns.

It is a suitable candidate for investors who want to invest in developed-market stocks outside the US while reducing fossil fuel exposure. If you want broad international exposure without exclusion criteria, compare products such as EFA and VEA, and if you want fossil fuel exclusion, compare this product alongside them before choosing.