Schwab International Equity ETF beats iShares Emerging Markets on fees and yield

Schwab International Equity ETF (SCHF) offers a 0.03% expense ratio and a 3.1% trailing-12-month dividend yield, outperforming the iShares MSCI Emerging Markets ETF (EEM) on cost and payout. The iShares fund carries a 0.72% expense ratio and a 1.8% yield, reflecting its focus on high-growth developing markets with a distinct risk profile.

For investors broadening portfolios with international stocks, the choice between these two funds involves balancing costs against volatility and sector exposure. Schwab International Equity ETF tracks developed markets outside the U.S., holding 1,443 assets. Its portfolio is weighted toward Financial Services at 25%, Technology at 17%, and Industrials at 14%. The fund’s largest positions include Samsung Electronics Ltd at 2.79%, ASML Holding at 2.28%, and SK Hynix at 2.12%. Launched in 2009, the fund has paid $0.84 per share over the trailing 12 months, which translates to a 3.1% yield on its recent share price of approximately $27.02.

In contrast, iShares MSCI Emerging Markets ETF targets developing nations, providing exposure to 1,186 companies. Information Technology dominates this portfolio at 44%, with Financials accounting for 19% and Consumer Discretionary for 7%. Its top holdings include Taiwan Semiconductor Manufacturing at 15.97%, Samsung Electronics Ltd at 6.29%, and SK Hynix at 4.46%. Launched in 2003, the iShares fund has paid $1.11 per share over the trailing 12 months, working out to a 1.8% yield on its recent share price of approximately $63.96.

While EEM has returned more than SCHF over the last year, that recent advantage does not guarantee future performance. Schwab International Equity ETF is positioned as a default choice for everyday investors seeking low-cost, broad exposure to developed markets outside the U.S. Conversely, iShares MSCI Emerging Markets ETF suits investors who can handle greater volatility, political risk, and concentration in exchange for emerging-market exposure.