Schwab Emerging Markets Equity ETF

SCHE

Market cap $12.3B

EEM has delivered a stronger 1-year return but comes with a higher expense ratio and a slightly lower yield than SCHE EEM holds fewer stocks with a heavier technology tilt, while SCHE spreads assets across more companies and sectors EEM is more volatile and has experienced a deeper drawdown over the past five years

The Schwab Emerging Markets Equity ETF has modestly outperformed the S&P 500 so far in 2026. This comes as cheap valuations and solid long-term GDP growth expectations for emerging markets outweigh near-term energy price uncertainty. SCHE has modest direct Middle East exposure, but key holdings domiciled in China, Taiwan, and India are likely to see temporary earnings pressure amid the war in Iran.

The Schwab Emerging Markets Equity ETF features a higher dividend yield and stronger one-year return but carries greater historical drawdown than the SPDR Portfolio MSCI Global Stock Market ETF. The Schwab Emerging Markets Equity ETF is concentrated in emerging markets, with heavy exposure to Taiwan Semiconductor, Tencent, and Alibaba, while the SPDR Portfolio MSCI Global Stock Market ETF offers global diversification led by U.S. tech giants.

SCHE charges a slightly higher expense ratio and has lagged VXUS in recent one-year returns VXUS holds far more stocks and covers both developed and emerging markets, while SCHE is focused solely on emerging economies SCHE tilts heavily toward technology and a handful of large Chinese and Taiwanese firms, increasing concentration risk

IXUS covers a broader international universe and has delivered a higher 1-year return than SCHE. Both ETFs charge the same low expense ratio, but IXUS offers a slightly higher dividend yield.

IEFA carries a higher yield and even larger asset base than SCHE. Both funds charge the same low expense ratio but differ in geographic and sector exposure.

EEM commands a much higher expense ratio and has a longer track record than SCHE. SCHE delivers a higher dividend yield, while EEM has outperformed over the past year.

At the same time developed markets have been generating policy and macro noise, emerging markets have been quietly outperforming. The inextricable relationship between the direction of U.S. monetary policy and emerging market risk assets remains powerful, but this time the rally is not just about the Fed.

Schwab Emerging Markets Equity ETF (SCHE) offers a compelling 44% P/E discount to the S&P500, with broad exposure to China and Asia's growth engines. SCHE's top holdings include TSMC, Tencent, and Alibaba, providing access to leading tech and consumer platforms in emerging markets. Despite long-term volatility, SCHE and peers have recently outperformed the S&P500, driven by a falling U.S. dollar and global capital rotation.

IEMG commands a much larger assets under management (AUM) base and offers broader exposure with more holdings than SCHE IEMG delivered higher 1-year and 5-year returns, but with a slightly deeper maximum drawdown over five years Both ETFs show similar sector allocations and top holdings, but IEMG carries a marginally higher expense ratio These 10 Stocks Could Mint the Next Wave of Millionaires ›