Why I Am Buying the Schwab International Equity ETF (SCHF) and Never Looking Back

If you're looking for a broad index fund that could deliver solid returns over decades, take a look at the Schwab International Equity ETF (NYSEMKT: SCHF). It's a fund I plan to consider heavily the next time I'm looking to deploy some dollars.

Let's take a closer look at the fund.

First of all, know that it's an exchange-traded fund (ETF) -- a fund that trades like a stock. It's also an index fund, like the venerable S&P 500 index fund. But while the S&P 500 index encompasses 500 of the biggest American companies, the Schwab International Equity ETF has a very different focus: It encompasses more than 1,400 non-U.S. companies.

Image source: Getty Images.

This ETF could serve you very well if:

• You have mainly U.S.-based investments in your portfolio and you'd like some exposure to international stocks.
• You're worried about a recession in the U.S. economy, fearing that your U.S. holdings may pull back in the months to come.
• You'd like some dividend income. (This ETF sports a very solid dividend yield -- recently 3.4%.)
• You favor funds with low fees. This one's expense ratio (annual fee) is 0.03%, which will cost you $3 per year for every $10,000 you have invested in it.

How has the ETF performed? Check it out:

Data source: Morningstar.com as of Jan. 21, 2026.

That's quite respectable.

What's in the fund? Its recent top holdings included ASML Holding, Samsung Electronics, Roche Holding, HSBC Holding, and Novartis AG. Odds are, you've heard of a few of those -- and many others in the fund, too. Investing in this ETF means investing in gobs of big foreign-based companies, including many that count you as a customer.

Note, too, that while these are foreign companies, they're not entirely disconnected from the U.S. We live in a global world right now, so you'll find plenty of HSBC bank locations in America and you may be taking some medications made by Roche or Novartis and your television may feature a big Samsung logo.

The ETF is market-cap weighted, too, meaning that the biggest companies in the fund will wield the most influence on it. That can be a worry, when a fund is very concentrated with huge companies, but it can also provide a tailwind, when those companies are huge because they've been great growth stocks.

So think about whether this ETF would be a good fit for your long-term portfolio. Know, too, that there are other promising internationally focused ETFs you might also consider.

HSBC Holdings is an advertising partner of Motley Fool Money. Selena Maranjian has positions in ASML, HSBC Holdings, Novartis, and Roche Holding AG. The Motley Fool has positions in and recommends ASML. The Motley Fool recommends HSBC Holdings and Roche Holding AG. The Motley Fool has a disclosure policy.