SCHD
Schwab U.S. Dividend Equity ETF
SCHD tracks the Dow Jones U.S. Dividend 100 Index, focusing on high dividend yield with rigorous quality screens. Requires 10+ years of dividend payments and screens for financial health metrics. 100% US exposure to quality large-cap companies.
EFA
iShares MSCI EAFE ETF
EFA tracks the MSCI EAFE Index, providing exposure to developed markets outside of North America (Europe, Australasia, Far East). Includes large and mid-cap companies from 21 developed countries, excluding the US and Canada.
Key Metrics Comparison
| Metric | SCHD | EFA | Winner |
|---|---|---|---|
| Dividend Yield | 3.27% | 2.85% | SCHD (+0.61%) |
| Expense Ratio | 0.06% | 0.33% | SCHD (-0.27%) |
| 5-Year Annual Return | 11.2% | 5.2% | SCHD (+6.0%) |
| Number of Holdings | 104 | 791 | EFA |
| Assets Under Management | $95.2B | $55.8B | EFA |
| P/E Ratio | 15.2 | 14.5 | EFA |
| Geographic Exposure | 100% US | 100% Ex-US Developed | Complementary |
| Volatility (5-Year) | 15.2% | 16.8% | SCHD |
Performance Comparison
SCHD Performance
Strong total returns from US quality dividend stocks. Has significantly outperformed international developed markets over the past decade with lower volatility.
EFA Performance
Modest returns from developed international markets. Provides diversification but has underperformed US markets significantly. Higher expense ratio impacts net returns.
Strategy Analysis
SCHD Approach
US-focused quality dividend growth investing:
- 100% US large-cap companies
- Minimum 10 years of dividend payments
- Dividend yield > 2.5% requirement
- Cash flow to total debt > 50%
- Return on equity > 15%
- Focus on financial health and stability
- Value-oriented, defensive sectors
- Concentrated in 104 quality companies
EFA Approach
Developed international markets indexing:
- 100% ex-US developed markets
- 21 developed countries (Europe, Japan, Australia)
- 791 large and mid-cap companies
- MSCI EAFE Index tracking
- Market-cap weighted
- No emerging markets exposure
- Currency exposure to EUR, JPY, GBP, etc.
- Long-established international benchmark
US Quality vs Developed International Markets
SCHD offers US quality concentration (104 holdings, quality screens, 3.27% yield) with strong recent performance, while EFA provides developed international diversification (791 holdings, 21 countries, 2.85% yield) through the established MSCI EAFE Index.
SCHD Advantages
Quality screens: Financial health filters
Higher income: 3.27% yield vs 2.85%
Better returns: 11.2% vs 5.2% (5-year)
Lower cost: 0.06% vs 0.33% expense ratio
EFA Advantages
Geographic diversification: 21 developed countries
Currency diversification: Hedge against USD
Established benchmark: MSCI EAFE standard
Valuation discount: P/E 14.5 vs 15.2
Geographic & Regional Exposure
EFA Regional Distribution (SCHD is 100% US)
EFA provides exposure to developed markets in Europe, Japan, and other developed countries in the Pacific region through the MSCI EAFE (Europe, Australasia, Far East) Index.
Europe
Japan
Pacific Developed
Middle East
Income Analysis
SCHD Income Profile
High dividend income from US quality companies with strong dividend growth history. Focus on sustainable dividends from financially healthy US corporations.
EFA Income Profile
Moderate yield from developed international markets. Many European and Japanese companies have strong dividend cultures but face currency conversion risk for US investors.
Sector Allocation
SCHD Sectors (US Focus)
EFA Sectors (Developed International)
Top 5 Holdings
SCHD Top Holdings (US)
EFA Top Holdings (Developed International)
Investment Recommendation
🎯 Choose SCHD If:
- Higher current income is important (3.27% vs 2.85%)
- You prefer US-focused quality dividend growth
- Better historical returns matter (11.2% vs 5.2%)
- Lower costs are critical (0.06% vs 0.33%)
- Dividend growth is a priority (8.5% vs 3.8%)
- You're focused on US market opportunities
- You want quality screens and financial health filters
- Currency risk is a concern (SCHD has none)
🌐 Choose EFA If:
- Developed international diversification is your priority
- You want exposure to 21 developed countries
- Europe and Japan exposure appeals to you
- Currency diversification is important
- You want established MSCI EAFE Index exposure
- You're building a globally diversified portfolio
- You want to hedge against US market underperformance
- You prefer developed markets over emerging markets risk
💡 Portfolio Construction Strategy
Most investors use SCHD and EFA together in a complementary strategy. Consider VTI (US total market) as your core holding (40-50%), with SCHD for US quality income tilt (20-30%) and EFA for developed international diversification (20-30%). Note that EFA's higher expense ratio (0.33%) makes VEA (Vanguard FTSE Developed Markets, 0.05%) a more cost-effective alternative for developed international exposure. For a balanced US/international approach: 50% VTI, 25% SCHD, 25% VEA/EFA.