Better Emerging Markets ETF: Schwab's SCHE vs. Vanguard's VWO
Both charge identical 0.06% fees, but Schwab delivers a higher 2.7% dividend yield while Vanguard provides nearly 6,000 holdings for broader diversification.
Investors must decide between the Schwab Emerging Markets Equity ETF (SCHE) and the Vanguard FTSE Emerging Markets ETF (VWO) when seeking exposure to developing economies. Both funds have identical fees, but vary in diversification and yield. These ETFs track FTSE indices, capturing companies from countries like China, Taiwan, and India, at extremely low costs suitable for long-term investors.
The beta of both funds measures their price volatility relative to the S&P 500, calculated from monthly returns over up to five years of fund history. Both have a negligible expense ratio of 0.06%. However, SCHE offers a more substantial dividend yield at 2.7%, surpassing VWO's 2.1%. VWO, with an AUM of $164.7 billion, is the fund for those prioritizing liquidity and a broad basket of nearly 6,000 global emerging market equities, making it a natural choice for existing Vanguard customers.
SCHE, with a smaller scope focused on larger companies, is a better fit for existing Schwab customers seeking a higher dividend yield.
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