SCHF delivers broad exposure to developed market stocks outside the U.S., capturing large and mid-cap companies across Europe, Japan, and the Pacific. At just 6 basis points, it's one of the cheapest ways to own international equities.
How It Works
The fund tracks the FTSE Developed ex US Index, holding roughly 1,500 stocks weighted by market cap. Japan typically represents about 20% of the portfolio, with the UK, France, and Switzerland rounding out the top positions. The index screens out small caps and emerging markets, focusing on established companies in stable economies.
Key Features
- Rock-bottom 0.06% expense ratio beats most competitors by 10+ basis points annually
- 3.43% dividend yield provides meaningful income from mature international companies
- Tax-efficient structure with strong securities lending revenue offsetting costs
Risks
- Currency risk can add 10-15% annual volatility as the dollar strengthens or weakens
- Zero emerging markets exposure means missing growth from China, India, and Brazil
- European banks and Japanese industrials create sector concentration different from U.S. markets
Who Should Own This
Perfect for cost-conscious investors building a three-fund portfolio who want international diversification without the complexity of emerging markets. The high dividend yield also appeals to retirees seeking income beyond U.S. sources, though they'll need to stomach currency swings.