The Motley Fool·2026-01-25 22:30Core Insights - The Schwab Emerging Markets Equity ETF (SCHE) offers lower costs and higher yields compared to the iShares MSCI Emerging Markets ETF (EEM), which has a longer history and greater tech exposure [1][4][10] Cost and Size Comparison - SCHE has an expense ratio of 0.07%, significantly lower than EEM's 0.72%, which could lead to compounded savings over time [3][4] - As of January 22, 2026, SCHE's one-year return is 28.4%, while EEM's is 37.9% [3] - SCHE has a dividend yield of 2.9%, higher than EEM's 2.2% [3][9] - SCHE has assets under management (AUM) of $12.0 billion, compared to EEM's $25.1 billion [3] Performance and Risk Comparison - Over the past five years, SCHE's maximum drawdown is -35.70%, while EEM's is -39.82% [5] - The growth of $1,000 invested over five years is $1,036 for SCHE and $1,044 for EEM [5] Holdings and Diversification - EEM tracks large- and mid-cap companies with a 30% tilt towards technology, while SCHE has a 22% tech exposure and holds over 2,100 stocks, making it more diversified by company count [6][7] - EEM's top holdings include Taiwan Semiconductor Manufacturing, Tencent Holdings, and Samsung Electronics, which make up 21.5% of its assets [6] - SCHE's top holdings also feature Taiwan Semiconductor, Tencent, and Alibaba Group, comprising nearly 22% of its assets [7] Investment Implications - Both SCHE and EEM provide passive investment opportunities in emerging markets, holding over 1,000 stocks each [8] - The significant difference in expense ratios suggests that SCHE may be a more cost-effective option for investors seeking exposure to emerging markets [10]