IXUS vs SCHE: Which International ETF Is the Better Buy in 2026?

The Schwab Emerging Markets Equity ETF (NYSEMKT:SCHE) provides targeted exposure to developing economies at a lower cost, while the iShares Core MSCI Total International Stock ETF (NASDAQ:IXUS) offers broader global diversification including developed nations.

Both funds serve as primary tools for diversifying a portfolio beyond United States borders. While the iShares fund captures a vast array of large, mid, and small-cap stocks across all international regions, the Schwab fund focuses exclusively on emerging markets, which may offer higher growth potential but different volatility risks.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

Cost is a minor differentiator in this matchup, with the Schwab fund edging out the competition with a 0.06% expense ratio. The iShares fund currently provides a slightly higher payout for income-seeking investors with a distribution yield of 2.94%.

Performance & risk comparison

What's inside

The Schwab Emerging Markets Equity ETF focuses on developing nations, with the technology sector accounting for 33.8% of the portfolio, followed by financial services at 21.1% and consumer cyclical at 8.9%. Its largest positions include Taiwan Semiconductor Manufacturing at 17.1%, Tencent Holdings Ltd at 3.2%, and Alibaba Group Holding Ltd at 2.1%. The fund holds 2,223 stocks and was launched in 2010. Schwab Emerging Markets Equity ETF has paid $0.95 per share over the trailing 12 months, which, on its recent $35.88 share price, works out to a 2.66% yield.

The iShares Core MSCI Total International Stock ETF maintains a broader reach by including developed markets such as Japan and the United Kingdom, resulting in a sector mix of technology at 22.4% and financial services at 22.3%. Its top holdings include Taiwan Semiconductor Manufacturing at 4.4%, Samsung Electronics Ltd at 2.4%, and Sk Hynix Inc at 2.2%. This fund is significantly more diversified with 4,166 holdings and was launched in 2012. iShares Core MSCI Total International Stock ETF has paid $2.80 per share over the trailing 12 months, which, at its recent $93.67 share price, works out to a 2.94% yield.

Which fund is the better buy?

There is one primary similarity between these ETFs: they both provide exposure outside the U.S. stock markets. But digging deeper into them, they have some key differentiators that investors should consider.

The Schwab Emerging Markets Equity ETF — SCHE — is 85% in large-cap stocks and is quite concentrated in Asia, with three-quarters of its portfolio in Taiwan (33%), mainland China (26%), and India (16%). Its top 10 holdings reflect that concentration, with almost 30% of its assets divvied among its top 10 holdings. That’s not as concentrated as many ETFs, but it is still more concentrated than the iShares offering.

The iShares Core MSCI Total International Stock ETF — IXUS — is more geographically diverse, mainly by providing exposure to developed Europe. IXUS is 19% in the eurozone compared to less than 15 for SCHE, with 15% in Japan, a country SCHE doesn’t invest in.

While the emerging markets-focused portfolio suggests that SCHE should outperform IXUS in the long run, the performance statistics show otherwise. IXUS is beating SCHE this year, in the 1-year period as detailed above, and in the 3-, 5-, and 10-year timeframes. IXUS has produced annualized returns of 18.9% to 17% for SCHE in the 3-year look-back, 8.8% to 54.8% in the 5-year, and 10.1% compared to 8.4% over the 10-year period.

When it comes to choosing among ETFs offering specific exposure, the long-term track record is usually the best way to choose where to park your money.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.