SCHF vs. IEFA: Which ETF Delivers Lower Fees and a Higher Dividend Yield?

Core Insights - The Schwab International Equity ETF (SCHF) and iShares Core MSCI EAFE ETF (IEFA) are both focused on providing exposure to developed international markets, with SCHF tracking the FTSE Developed ex US Index and IEFA targeting the MSCI EAFE universe [4][5] - Both funds have significant holdings in major companies such as ASML and Roche, and they share similar sector allocations, particularly in financial services [6][8] - The main differences between the two funds lie in their expense ratios and dividend yields, with SCHF offering a lower expense ratio of 0.03% and a higher dividend yield of 3.5% compared to IEFA's 0.07% expense ratio and 2.9% yield [7][8] Fund Characteristics - SCHF has a portfolio of 1,501 companies, while IEFA holds 2,600 stocks, indicating a broader diversification in IEFA [2][4] - Sector allocations for both funds show a tilt towards financial services (22-24%), industrials (19-20%), and healthcare (10%) [2][6] - Both funds have generated a one-year return of approximately 22% and have similar maximum five-year drawdowns of around -30% [6][8] Investment Considerations - For cost-conscious investors, SCHF's lower expense ratio may be more appealing, while income-focused investors might prefer its higher dividend yield [7][8] - The choice between SCHF and IEFA may ultimately depend on individual investment goals, with SCHF slightly edging out in terms of fees and income potential [8]