SWISX vs SCHF: Key Differences at a Glance
When comparing Schwab’s SWISX (Schwab International Index Fund) and SCHF (Schwab International Equity ETF), investors often focus on structure, cost, and accessibility. Both funds provide exposure to international developed markets, but their differences may sway your decision:
- Fund Type: SWISX is a mutual fund; SCHF is an ETF.
- Trading Flexibility: SCHF trades like a stock (intraday), while SWISX prices once daily.
- Expense Ratio: Both charge 0.06%, but SCHF may have lower transaction costs.
- Tax Efficiency: SCHF’s ETF structure reduces capital gains distributions.
- Minimum Investment: SWISX requires $1+; SCHF has no minimum beyond share price.
Performance Comparison: SWISX vs SCHF
Historically, SWISX and SCHF have delivered similar returns, but subtle differences arise from their benchmarks:
- SWISX tracks the MSCI EAFE Index (Europe, Australasia, Far East).
- SCHF follows the FTSE Developed ex US Index, excluding South Korea.
Over the past 5 years, both funds have averaged ~6% annual returns. SCHF slightly outperforms in sectors like tech due to its exclusion of South Korean equities, which are classified as emerging by FTSE.
Expense Ratios and Fees
Both funds boast a low 0.06% expense ratio. However:
- SWISX: No transaction fees for Schwab clients, but potential bid-ask spreads apply for non-Schwab platforms.
- SCHF: Lower trading costs for frequent investors due to ETF structure.
Tax Efficiency: SWISX vs SCHF
ETFs like SCHF use in-kind transfers to minimize taxable events, making them ideal for taxable accounts. SWISX, as a mutual fund, may distribute capital gains annually, increasing tax liability.
Minimum Investment Requirements
SWISX requires a $1 minimum initial investment, while SCHF can be bought for the price of one share (~$35 as of 2023). This makes SCHF more accessible for small investors using fractional shares.
FAQ: SWISX vs SCHF
1. Which fund is better for long-term holding?
Both are solid, but SCHF’s tax efficiency favors taxable accounts.
2. Do these funds include emerging markets?
No—both focus on developed markets. Consider SCHE for emerging markets.
3. Can I automate investments in SCHF?
Yes, through Schwab’s ETF automatic investment plan.
4. Which has higher dividend yields?
SCHF (3.2%) edges out SWISX (3.0%) due to sector weighting differences.
5. Are these funds good for diversification?
Yes—both reduce U.S. market correlation, but pair with domestic and emerging market funds for balance.
