Better International ETF: iShares' IEFA vs. Schwab's SCHE

Core Insights - The Schwab Emerging Markets Equity ETF (SCHE) and iShares Core MSCI EAFE ETF (IEFA) provide low-cost international diversification but differ significantly in regional focus, sector weights, and recent performance [1][2] Cost & Size - Both SCHE and IEFA have an expense ratio of 0.07% - As of February 4, 2026, SCHE has a one-year return of 26.1% while IEFA has a return of 29.0% - SCHE offers a dividend yield of 2.8%, whereas IEFA provides a higher yield of 3.4% - SCHE has a beta of 0.87, indicating lower volatility compared to the S&P 500, while IEFA has a beta of 1.01 - Assets under management (AUM) for SCHE stand at $12.2 billion, significantly lower than IEFA's $173.4 billion [3][4] Performance & Risk Comparison - Over the past five years, SCHE experienced a maximum drawdown of -35.70%, compared to IEFA's -30.41% - An investment of $1,000 in SCHE would have grown to $1,027 over five years, while the same investment in IEFA would have grown to $1,338 [5] Portfolio Composition - IEFA includes over 2,500 developed-market stocks, with significant sector allocations in financial services (22%), industrials (20%), and healthcare (11%) - Major holdings in IEFA include ASML Holding, Roche Holding, and HSBC Holdings - SCHE focuses on emerging markets, with a notable emphasis on technology (23%) and financial services (23%), featuring top positions in Taiwan Semiconductor Manufacturing, Tencent Holdings Ltd., and Alibaba Group [6][7] Investor Implications - IEFA is suitable for investors seeking lower risk and volatility, given its focus on developed markets and larger number of holdings, which contributes to its lower five-year drawdown and higher dividend yield - SCHE appeals to aggressive investors looking for growth, particularly in technology stocks, but comes with higher volatility and political risks associated with emerging markets [9][10]