IEFA vs. SCHF: Lower Fee or Higher Dividend?

Core Insights - Investors must choose between lower fees or higher dividend yields when selecting between Schwab International Equity ETF (SCHF) and iShares Core MSCI EAFE ETF (IEFA) [1][4] - SCHF has lower costs and slightly better five-year performance, while IEFA offers a higher yield and broader diversification [1][2] Cost and Size Comparison - SCHF has an expense ratio of 0.03% and assets under management (AUM) of $51.5 billion, while IEFA has an expense ratio of 0.07% and AUM of $155.4 billion [3] - The one-year return for SCHF is 24.9% compared to IEFA's 24.1%, and SCHF has a dividend yield of 2.4% versus IEFA's 3.0% [3] Performance and Risk Metrics - Over five years, SCHF experienced a maximum drawdown of 29.1%, while IEFA had a drawdown of 30.4% [5] - An investment of $1,000 would grow to $1,345 in SCHF and $1,301 in IEFA over five years [5] Portfolio Composition - IEFA holds 2,608 stocks with sector allocations of 22% Financial Services, 19% Industrials, and 11% Healthcare, indicating a highly diversified approach [6] - SCHF has 1,500 holdings with a sector mix of 25% Financial Services, 19% Industrials, and 11% Technology, highlighting its broad spread [7] Investment Appeal - Both ETFs provide instant diversification, making them attractive for investors seeking international exposure [8][9] - The decision between SCHF and IEFA should consider fees, as IEFA's fee is more than double that of SCHF, which could significantly impact long-term returns [9][10]