Schwab International Equity ETF offers a significantly higher dividend yield than iShares Core MSCI EAFE ETF
iShares Core MSCI EAFE ETF holds more stocks and has a lower beta, suggesting less volatility
Both funds share similar top holdings and sector weights, but SCHF is notably cheaper to own on an ongoing basis
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The main differences between Schwab International Equity ETF (SCHF)(NYSEMKT:SCHF) and iShares Core MSCI EAFE ETF (IEFA) (NYSEMKT:IEFA) lie in yield, volatility, and number of holdings, with SCHF offering a higher dividend payout but IEFA covering a wider slice of developed international markets.
Both ETFs aim to provide exposure to developed markets outside the U.S, but Schwab International Equity ETF (SCHF) tracks the FTSE Developed ex US Index with a focus on broad diversification and low costs, while iShares Core MSCI EAFE ETF (IEFA) targets the MSCI EAFE universe, including a larger number of companies across more countries. This comparison highlights their differences in cost, risk, yield, and portfolio construction.
Metric | SCHF | IEFA |
|---|
Issuer | Schwab | IShares |
Expense ratio | 0.03% | 0.07% |
1-yr return (as of Dec. 12, 2025) | 21.2% | 22.0% |
Dividend yield | 3.5% | 2.9% |
Beta | 0.86 | 0.85 |
AUM | $54.8 billion | $161.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months as of Dec. 12, 2025.
SCHF is more affordable to own with a 0.03% expense ratio compared to IEFA’s 0.07%. SCHF also pays out a much higher dividend yield, which could appeal to income-focused investors, while IEFA’s yield is considerably lower.
Metric | SCHF | IEFA |
|---|
Max drawdown (5 y) | -29.17% | -30.41% |
Growth of $1,000 over 5 years | $1,341 | $1,330 |
IEFA holds 2,600 stocks and has a 13.1-year history. The fund tilts toward financial services (22%), industrials (20%), and healthcare (10%), with top positions in Asml Holding, Astrazeneca, and Roche Holding. This wide coverage may appeal to investors seeking diversification across a larger basket of international equities.
In contrast, Schwab International Equity ETF focuses on financial services (24%), industrials (19%), and technology (11%), with a slightly more concentrated portfolio of 1,501 companies. Its largest holdings include Asml Holding, Samsung Electronics, and Roche Holding. Both funds avoid major quirks, tracking broad, non-hedged developed markets indexes.
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For investors seeking international exposure, the Schwab International Equity ETF (SCHF) and iShares Core MSCI EAFE ETF (IEFA) are both viable options. Here are how these two funds stack up against one another.
First, the similarities. Both funds are focused on the international market and boast holdings in some of the largest non-American companies. For example, both have significant holdings in ASML and Roche. Moreover, both funds have about 22-24% of their total exposure in financial service companies. Finally, the funds’ performance metrics are nearly identical. They have both generated a one-year return of around 22% and their max five-year drawdown is nearly identical at approximately -30%.
Turning to differences, the two funds’ key differences revolve around their expense ratios and dividend yields.
SCHF boasts the lower expense ratio of 0.03%, versus 0.07% for IEFA. Granted, both of these expense ratios is low, but SCHF’s lower expense ratio might sway extremely cost-conscious investors.
Next, there’s dividend yield. Here, SCHF again comes out on top, with a dividend yield of 3.5%, versus a dividend yield of 2.9% for IEFA. Again, this could tip the scales in favor of SCHF.
In summary, these two funds are more alike than different. However, for investors highly attuned to fees, or for those looking to maximize income, SCHF slightly edges out IEFA.
ETF: Exchange-traded fund; a security that tracks an index, sector, or asset basket and trades like a stock.
Dividend yield: Annual dividends paid by a fund or stock, expressed as a percentage of its current price.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Beta: A measure of an investment’s volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund or manager oversees.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period.
Developed markets: Countries with advanced economies and established financial systems, such as Japan, the UK, and Germany.
Index: A statistical measure representing a group of securities, used as a benchmark for performance.
Portfolio construction: The process of selecting and weighting assets within a fund to achieve specific investment goals.
Sector weights: The proportion of a fund’s assets allocated to different industry sectors.
Diversification: Spreading investments across various assets to reduce risk.
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Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and AstraZeneca Plc. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.
SCHF vs. IEFA: Which ETF Delivers Lower Fees and a Higher Dividend Yield? was originally published by The Motley Fool
