We have been advocating Freedom Investing since 2004. Every year, The Heritage Foundation evaluates all the world’s countries using their Index of Economic Freedom, where a high score correlates to nearly every positive measure of a country. We then use this ranking and efficient frontier analysis to craft our Foreign Stock investment strategy that we call “Freedom Investing.”

This article is part of my series where I review how Freedom Investing performs for the quarter. In this analysis, I have used the actual products we are investing in rebalanced monthly to our static asset allocation targets with returns ending December 31, 2023. This analysis does not reflect our dynamic tilt or our individual stock foreign health care strategy, both of which we implement in client portfolios.

For benchmarks, I have used actual products as comparison. The EAFE (EFA) should be compared to Developed Freedom Investing, Emerging Market (VWO) should be compared to Emerging Market Freedom Investing, and the All World ex-US (ACWX) should be compared to the Overall Freedom Investing.

In March 2023, our Investment Committee updated our Freedom Investing strategy for the new 2023 Index of Economic Freedom. For the purposes of this model, those changes are assumed to have been implemented during the March 1, 2023 rebalancing. You can read about those changes in “2023 Index of Economic Freedom Update.”

In July 2023, our Investment Committee changed our emerging market strategy to reduce our exposure to China by adding an ex-China fund. For the purposes of this model, those changes are assumed to have been implemented during the July 1, 2023 rebalancing. You can read more about those changes in “Adding an Ex-China Fund to Our Emerging Market Strategy (July 2023).”

Last quarter, we saw that in 1-year returns ending September 30, 2023, Developed Freedom Investing had a -4.77% disadvantage, Emerging Market Freedom Investing had a +3.89% advantage, and Overall Freedom Investing had a -1.63% disadvantage.

This quarter, we saw that in 1-year returns ending December 31, 2023, Developed Freedom Investing had a -3.97% disadvantage, Emerging Market Freedom Investing had a +4.9% advantage, and Overall Freedom Investing had a -1.27% disadvantage.

You can find our articles reviewing the performance of Freedom Investing here.

	Ticker	3-Month	6-Month	9-Month	1-Year
iShares MSCI EAFE ETF (Market Return)	EFA	10.71%	5.25%	8.66%	18.40%
Developed Freedom Investing		12.40%	6.58%	7.20%	14.42%
Australia	FLAU	14.66%	9.48%	9.96%	12.58%
Austria	EWO	13.30%	9.69%	13.22%	20.65%
Canada	FLCA	12.20%	6.94%	10.85%	14.73%
Denmark	EDEN	11.92%	5.30%	7.95%	17.99%
Finland	EFNL	12.33%	4.09%	-2.69%	-0.10%
Ireland	EIRL	13.42%	6.36%	12.56%	35.12%
Netherlands	EWN	18.27%	3.90%	7.75%	22.10%
New Zealand	ENZL	11.77%	1.07%	0.14%	2.99%
Norway	ENOR	3.68%	10.20%	8.70%	2.98%
Singapore	EWS	5.01%	4.11%	0.66%	6.23%
Sweden	EWD	22.67%	14.19%	13.80%	25.10%
Switzerland	FLSW	11.05%	4.54%	8.74%	16.78%
United Kingdom	FLGB	7.37%	5.15%	8.09%	14.38%
	Ticker	3-Month	6-Month	9-Month	1-Year
Emerging Markets Freedom Investing		9.90%	5.59%	7.94%	14.16%
Emerging Markets	VWO	7.08%	4.05%	5.35%	9.27%
Emerging Markets ex-China	XCEM	11.78%	7.17%	13.31%	19.96%
Taiwan	FLTW	16.30%	10.01%	14.67%	30.09%
South Korea	FLKR	13.42%	6.41%	10.51%	19.18%
Chile	ECH	8.41%	-2.70%	2.58%	8.98%
	Ticker	3-Month	6-Month	9-Month	1-Year
Overall Freedom Investing		11.45%	6.22%	7.53%	14.40%
iShares MSCI ACWI ex US ETF (Market Return)	ACWX	10.14%	5.19%	7.91%	15.67%

For more information about Freedom Investing, you may enjoy reading “A 25-Year Review of Freedom Investing” or “Risk-Return Analysis of Freedom Investing.”

Photo of Sweden by Mikael Stenberg on Unsplash. Image has been cropped. Returns data gathered from Morningstar Advisor Workstation.

Correction from April 1, 2024: The article as originally published unintentionally reported return numbers which included the dynamic tilt adjustments in the Freedom Investing model portfolios. I corrected the article to use the static asset allocation.