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Investing domestically is difficult enough. But if you're looking to invest overseas, things can get really difficult. Some of the complications of investing internationally include the following:

  • Accounting standards are different in other nations.
  • Audits aren't always as independent from a company's management's influence as they are in the United States. 
  • Financial reporting overseas isn't always done in English or on the same quarterly basis as American companies' stocks.
  • Nationalization of successful industries is a risk.
  • Investing in foreign companies may require international brokerage accounts and/or foreign-currency transactions on top of the investment itself.

For those reasons and more, international investing can be tough, even for those who are proficient in analyzing and picking great domestic American companies. That's what makes the iShares MSCI EAFE (NYSEMKT:EFA) ETF worthwhile to consider as a part of your portfolio.

3 reasons to pick EFA
Three key factors help the iShares MSCI EAFE ETF stand out from the crowd.

1. Instant diversification across top international markets
The iShares MSCI EAFE ETF invests only in companies headquartered in developed markets outside the United States and Canada. By focusing only on developed countries in Europe, Australia, Asia, and the Far East (namely Japan), the ETF sidesteps many of the worst political and accounting/audit risks that can be more prevalent in less developed countries.

By focusing on developed countries, the ETF provides exposure to most of the benefits of international investing while keeping the extra risks to a reasonable level. Sure, there will still be currency exposure risks and different regulatory risks internationally than in the U.S., but with the investments spread across many countries, those risks are somewhat muted thanks to diversification.

2. Instant diversification across top international companies
The iShares MSCI EAFE ETF invests in mid- to large-cap companies. Its holdings have already established themselves and grown to reasonable sizes, so they have staying power. Top investments include Swiss food behemoth Nestle, British banking giant HSBC, Japanese automobile titan Toyota, and German life-sciences powerhouse Bayer.

You will have already heard of and interacted with many of the mature companies in this ETF's portfolio. That kind of exposure to names you know can help you feel more at ease with the act of investing internationally.

3. Low-cost, low-churn indexing strategy
The iShares MSCI EAFE ETF seeks to track an index of mid- to large-cap companies trading in its target markets. Like many index investments, it has a reasonably low expense ratio (0.33%) and turnover rate (5%). Those low friction costs keep more of your money working on your behalf, letting you capture most of the potential rewards that may accrue from your choice to invest internationally.

All told, it's a great way to dip your toes into international investing
The MSCI EAFE ETF is designed to provide great exposure to top international companies in developed markets at a low overhead cost. While no investment is risk-free, the design of this ETF helps mitigate some of the biggest risks of investing overseas while still providing the opportunity to reap the benefits. That's a great balance that makes this ETF worthy of consideration.

Chuck Saletta has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.