ETF Evaluator: Schwab Emerging Markets Equity ETF™ (SCHE) Follow This ETF

Schwab Emerging Markets Equity ETF™ Overview

Schwab Emerging Markets Equity ETF™ (SCHE) is a passively managed International Equity Diversified Emerging Mkts exchange-traded fund (ETF). Schwab ETFs launched the ETF in 2010.

The investment seeks to track as closely as possible, before fees and expenses, the total return of the FTSE Emerging Index. The fund generally invests in stocks that are included in the FTSE Emerging Index. The index is comprised of large and mid capitalization companies in emerging market countries, as defined by the index provider. The fund will invest at least 90% of its net assets (including, for this purpose, any borrowings for investment purposes) in these stocks, including depositary receipts representing securities of the index; such depositary receipts may be in the form of ADRs, GDRs and EDRs.

About Schwab Emerging Markets Equity ETF™ (SCHE)

There are 4 members of the management team with an average tenure of 5.60 years: Christopher Bliss (2017), David Rios (2017), Joselle Duncan (2023) and Mariela Jobson (2024). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 2 primary benchmarks: MSCI EM NR USD index with a weighting of 100% and FTSE Emerging NR USD index with a weighting of 100%. Schwab Emerging Markets Equity ETF™ has 2222 securities in its portfolio. The top 10 holdings constitute 29.4% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

Schwab Emerging Markets Equity ETF™ is part of the Equity global asset class and is within the International Equity ETF group. Schwab Emerging Markets Equity ETF™ has 97.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 1.0% There is 97.7% allocated to foreign stock, and 0.2% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Schwab Emerging Markets Equity ETF™ has 1.2% of the portfolio in cash.

Assets Under Management

The fund has $12 billion in total assets, which is above the $3 billion average for the Diversified Emerging Mkts category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

SCHE Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Schwab Emerging Markets Equity ETF™ expense ratio is low compared to funds in the Diversified Emerging Mkts category. Schwab Emerging Markets Equity ETF™ has an expense ratio of 0.06%, which is 88% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Schwab Emerging Markets Equity ETF™ has a portfolio turnover rate of 7%, which indicates that it holds its assets around / 0.1 years. By way of comparison, the average portfolio turnover is 44% for the Diversified Emerging Mkts category.

Recently, in the month of June 2026, Schwab Emerging Markets Equity ETF™ returned -1.7%, which earned it a grade of D, as the Diversified Emerging Mkts category had an average return of -1.0%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

Schwab Emerging Markets Equity ETF™ has a trailing yield of 2.66%, which is above the 2.36% category average. The fund normally distributes its income semi-annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Schwab Emerging Markets Equity ETF™ Grades

Year to date, the ETF has returned 9.3%, 11.9 percentage points worse than the category, which translates into a grade of F. The fund has returned 22.9% over the past year (grade of F), 17.0% over the past three years (grade of D) and 4.8% per year over the past five years (grade of F) and 8.4% per year over the past 10 years (grade of D).

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