Will a State Street Global Stocks ETF Give You Better Returns Than a Schwab Emerging Markets Fund?

The primary distinction between State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) and Schwab Emerging Markets Equity ETF (NYSEMKT:SCHE) is geographic focus, as one provides all-cap global exposure while the other targets emerging markets exclusively.

Investors seeking international diversification often choose between broad global reach and targeted emerging market exposure. While both funds offer low-cost entries into non-U.S. equities, they serve different portfolio roles based on their regional concentration, underlying indices, and volatility profiles. This comparison evaluates how their varied strategies impact cost and total return.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on Aug. 20, 2026.

With an expense ratio of 0.06%, the Schwab fund is slightly more affordable than the 0.09% charged by the SPDR fund. Income-focused investors may also notice that the Schwab fund provides a higher payout with a yield gap of 0.85 of a point.

Performance & risk comparison

What's inside

State Street SPDR Portfolio MSCI Global Stock Market ETF holds 2,862 positions and seeks to replicate the total return of the MSCI ACWI IMI Index. Its largest positions include Nvidia Corp (NASDAQ:NVDA) at 4.4%, Apple Inc (NASDAQ:AAPL) at 3.9%, and Microsoft Corp (NASDAQ:MSFT) at 3.1%. The portfolio is largely allocated to technology at 30%, financial services at 17%, and industrials at 12%. The fund was launched in 2012. It has paid $1.54 per share over the trailing 12 months, which on its recent ~$87.32 share price works out to a 1.7% yield.

Schwab Emerging Markets Equity ETF focuses on 2,181 holdings within developing nations as it tracks the FTSE Emerging Index. Its sector concentration includes technology at 30%, financial services at 22%, and consumer cyclical at 10%. Top holdings in the portfolio include Taiwan Semiconductor Manufacturing at 17.9%, Tencent Holdings at 3.3%, and Alibaba Group Holding at 2.5%. The fund was launched in 2010. It has paid $0.95 per share over the trailing 12 months, which on its recent ~$36.71 share price works out to a 2.6% yield.

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Which looks like the better buy?

Both of these funds offer diverse equity exposure, but they differ greatly in their objectives, with one seeking to profit from stocks in developed markets and the other focusing largely on emerging markets for faster growth.

The Schwab fund, SCHE, is mostly in emerging markets, with 60% of its holdings in emerging markets, 38% in non-U.S. developed markets, and the balance in the U.S. Emerging markets theoretically should be faster growers than the developed world because it's more difficult to find growth off a large base, but sometimes that isn't the case in reality.

SCHE is heavily concentrated in three countries: Taiwan, home to 34% of its investments, mainland China with 25%, and India with 15% of the holdings. Interestingly, 85% of the portfolio is in large-cap stocks, meaning the Schwab fund owns the largest, most important stocks in its focus regions. That's a sensible approach, but it does forgo the potentially faster growth of medium and small-cap stocks. SCHE has returned 18.3%, 6.3%, and 8.1% annualized over the 3-, 5-, and 10-year terms, respectively.

SPGM, meanwhile, allocated about two-thirds of its portfolio to U.S. stocks, with 32% to developed markets outside the U.S. and 6% to emerging markets. It is similarly very heavy on large cap stocks, at 79% of its holdings, with 16% in mid caps and 5% in small caps. That means you may be buying a lot of stocks you already own elsewhere if you have an index fund focused on U.S. large caps. Indeed, nine of its top 10 holdings are U.S. tech companies that are almost certainly present in an S&P fund or a technology fund.

Still, one invests to make money, and on that front, SPGM delivers. The fund has returned an annualized 20.9% over the past three years, 11.3% over the previous five years, and 12.9% over the preceding decade. All of those periods outperformed SCHE's returns.

There is a reason to buy SCHE: diversification, which should protect your portfolio against a downturn in U.S. stocks better than SPGM. But SPGM's outperformance is too good to ignore.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool has a disclosure policy.