IEFA vs SCHE: A Portfolio Diary

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Right. So, the portfolio. It’s… a work in progress. A constant battle between wanting sensible, diversified investments and being lured by the shiny promise of ‘disruptive growth’. This week, it’s IEFA and SCHE. The iShares Core MSCI EAFE ETF and the Schwab Emerging Markets Equity ETF. Both international, both… ETFs. It sounds terribly grown-up, doesn’t it? Like I should be wearing sensible shoes and discussing interest rates over herbal tea. But let’s be honest, I barely understand what a dividend is, let alone how to pick the right one.

The point is, I’m supposed to be building a globally diversified portfolio. It’s the sensible thing to do, apparently. But deciding which international funds is proving… taxing. IEFA, it turns out, is all about developed markets. Think established economies, reliable companies, and… well, less chance of everything collapsing overnight. SCHE, on the other hand, is the adventurous one. Emerging markets. Higher potential rewards, but also a significantly increased risk of things going spectacularly wrong. It’s a bit like dating, really.

Snapshot (The Numbers, Ugh)

Metric SCHE IEFA
Issuer Schwab iShares
Expense ratio 0.07% 0.07%
1-yr return (as of 2026-02-04) 26.1% 29.0%
Dividend yield 2.8% 3.4%
Beta 0.87 1.01
AUM $12.2 billion $173.4 billion

So, the numbers. I’ve stared at them for approximately three hours. Both are remarkably cheap to hold (0.07% expense ratio – it’s practically free money, isn’t it?). IEFA has a slightly better dividend yield (3.4% versus 2.8%), which is nice. And a much larger pool of assets under management (AUM) – $173.4 billion versus $12.2 billion. Which, I’m told, means it’s more liquid. Which means… easier to sell if everything goes south. That’s reassuring, in a vaguely terrifying way.

Performance & Risk (The Bit That Makes Me Sweat)

Metric SCHE IEFA
Max drawdown (5 years) -35.70% -30.41%
Growth of $1,000 over 5 years $1,027 $1,338

Right. Drawdowns. Apparently, it’s a measure of how much you lose when things go wrong. SCHE has a bigger one (-35.70% versus -30.41%). Which means… it’s riskier. Obviously. Over five years, a $1,000 investment in IEFA would grow to $1,338. SCHE? $1,027. The numbers don’t lie. Though, let’s be honest, I’m still hoping for a miracle.

Inside the Funds (What Are We Actually Buying?)

IEFA is basically a collection of established, blue-chip companies in developed markets. ASML Holding, Roche Holding, HSBC Holdings. Solid, reliable… slightly boring? It’s been around for 13.3 years, which in the world of investing, is practically ancient. It’s all very… predictable. Which, after a year of crypto volatility, is almost a relief.

SCHE, on the other hand, is all about growth. Taiwan Semiconductor Manufacturing, Tencent Holdings, Alibaba Group. Tech giants, emerging markets, potential for huge gains… and equally huge losses. It’s a bit like backing a startup. Exciting, terrifying, and likely to end in tears. It’s a smaller fund, which adds to the risk. But also, perhaps, the potential reward.

What This Means (Or, My Investment Neuroses)

So, which one? IEFA is the sensible choice. Lower risk, more stable, good dividend yield. It’s the investment equivalent of a comfortable cardigan. SCHE is the exciting, slightly reckless option. The investment equivalent of a red sports car. It’s all about risk tolerance, isn’t it? And mine, frankly, is all over the place.

If I were a rational, disciplined investor (a girl can dream), I’d probably go with IEFA. It’s the smart choice. But part of me is tempted by SCHE. The potential for growth is just… alluring. It’s a bit like a bad romance novel. You know it’s probably not a good idea, but you can’t help but be drawn in.

Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. Will become disciplined long-term investor: Highly unlikely.

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2026-02-15 02:53