What does 'expense ratio' mean when comparing ETFs like SCHE and SPEM?

The expense ratio is the annual fee charged by the fund, expressed as a percentage of your investment. It covers management, administration, and operational costs. For SCHE, the expense ratio is 0.06%, while for SPEM it is 0.07%. This 0.01 percentage point difference means that for every $10,000 invested, SCHE costs $6 per year and SPEM costs $7 per year. Lower fees can enhance net returns over time, but they are just one factor to consider among many when evaluating ETFs.

How does the size of an ETF's net assets impact its liquidity and stability?

Net assets reflect the total value of holdings within the fund. SPEM has $17.7 billion in net assets, compared to SCHE's $12.9 billion. Larger asset bases often correlate with higher trading volumes and better bid-ask spreads, making buying and selling more efficient. While not directly impacting performance, size can influence the investor's experience through ease of trading. Both funds maintain substantial sizes, suggesting robust institutional interest and operational stability in their respective emerging markets portfolios.

What are 'top holdings' and why do they matter in comparing SCHE and SPEM?

Top holdings are the largest positions in an ETF’s portfolio. For SCHE, PDD constitutes 0.56% and AU 0.46%. For SPEM, top holdings include IBN at 0.67%, UMC at 0.53%, PDD at 0.47%, and NU at 0.39%. These weights are relatively low, which is typical for broad-market index funds holding thousands of companies across many countries. It shows the funds aim to reduce single-stock concentration risk. Understanding these holdings helps investors see which specific companies have the most influence on the fund’s performance.

How does dividend yield differ between SCHE and SPEM, and what should investors know?

Dividend yield indicates annual payouts as a percentage of price. SCHE yields 2.54%, while SPEM yields 2.43%. This difference reflects varying composition of underlying companies and payout policies. Dividends are distributed from earnings of held stocks and can fluctuate; they are not guaranteed. Yield differences, even small ones, may affect total return calculations. Investors should consider both capital growth and income potential, recognising that yields depend on market conditions and portfolio changes over time rather than fixed rates.

What type of investing goal is each fund typically associated with?

Both SCHE and SPEM are diversified emerging markets funds aimed at providing growth opportunities via exposure to developing economies. They are often aligned with long-term capital appreciation strategies. The slight difference in yield suggests SCHE may appeal to those seeking modestly higher income generation alongside growth, while SPEM’s larger asset base and older inception date might attract investors prioritising liquidity and established track record. Both serve those seeking to capture international economic growth trends within a portfolio framework.

Why is 'tracking' important in ETF comparisons, and what data is available for SCHE and SPEM?

Tracking refers to how closely a fund follows its benchmark index. For this specific data set, the exact index names tracked by SCHE and SPEM are not available, which limits the ability to assess methodological transparency or potential tracking error. Both funds aim to replicate broader emerging markets indices. Without precise index details, we cannot confirm if their holdings align with specific benchmarks. This is a key limitation for this data set; investors should consult official fund documentation for specific index tracking details.

What is the significance of having a shared top holding like PDD?

PDD is listed in the top 10 holdings for both SCHE (0.56%) and SPEM (0.47%). This overlap indicates that both funds have significant exposure to Chinese e-commerce company Pinduoduo, reflecting its weight in broader emerging markets indices. Shared holdings contribute to overall portfolio correlation, meaning both funds may react similarly to news affecting PDD. It also highlights that despite different issuers, the funds track similar market segments, leading to comparable constituent weights in high-value emerging market companies.

Can I rely solely on expense ratio when choosing between these funds?

No, expense ratio should not be the sole factor. While SCHE is 0.01 percentage points cheaper than SPEM, differences in yield, liquidity, and fund age also matter. SPEM is older and has higher assets, which can mean better liquidity. SCHE offers a slightly higher yield. Both are valid options for diversified emerging market exposure. It is essential to look at the entire picture, including how a fund fits into a broader portfolio, rather than relying on fees alone to make a comparison.

Is the lack of sector weight data for SCHE and SPEM a concern?

The lack of sector weight data in this specific context prevents a detailed breakdown of industry exposure (e.g., Technology, Financials, Industrials). This can make it harder to assess diversification nuances or specific sector risks. However, since both track broad emerging markets, they inherently spread risk across multiple sectors. Investors looking to understand exact sector exposure need to refer to the issuer's official fact sheets, where detailed holdings are typically disclosed to ensure transparency and informed decision-making.

How does the inception date affect the evaluation of these ETFs?

SPEM was launched in March 2007, while SCHE was launched in January 2010. This 3-year age difference means SPEM has a longer operating history and track record. For long-term investors, a fund's age can provide confidence in its resilience through various market cycles, though past performance does not predict future results. SCHE, being newer, still offers extensive data over 15+ years of operation. Investors should view the track record as part of the evaluation, focusing on how the fund has managed volatility and returns over time.

What does 'Diversified Emerging Mkts' mean for the underlying investments?

'Diversified Emerging Mkts' signifies exposure to a wide range of companies in developing economies across multiple countries and sectors. Both SCHE and SPEM follow this strategy, investing in over 1,000 companies typically. This diversification helps mitigate single-country or single-stock risks but does not eliminate the inherent volatility of emerging markets. These funds generally track broad indices of emerging markets, capturing the growth of countries like China, India, Brazil, and others, providing a comprehensive approach to international equity exposure.

What are the risks associated with the specific top holdings mentioned?

The top holdings include PDD (China), AU (Germany), IBN (India), UMC (Taiwan), and NU (Brazil/LatAm). These companies span different regions and industries, such as e-commerce, healthcare, and finance. This geographic spread is typical for emerging market funds. The risks associated with these holdings are inherent to emerging markets: political instability, currency fluctuations, and regulatory changes. Investors should be aware that these funds carry higher risk than developed market indices, even with diversification across the major companies listed in their top holdings.

SCHE vs SPEM

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare SCHE (Emerging Markets Equity ETF Schwab) and SPEM (SPDR Portfolio Emerging Markets ETF) to evaluate their fees, holdings, dividends and how each tracks its market. SCHE charges 0.06%, while SPEM charges 0.07%, with both offering diversified exposure. This page helps you understand their structural and cost differences without investment recommendations. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SCHE

Metric

SPEM

0.06%

Expense Ratio

0.07%

2.54%

Dividend Yield

2.43%

$12.89B

Net Assets

$17.71B

2,194

Holdings

2,816

Jan 14, 2010

Inception Date

Mar 19, 2007

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Index Tracked

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Diversified Emerging Mkts

Fund Category

Diversified Emerging Mkts

SCHE costs about $1.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	SCHE	SPEM
PDDPDD Holdings Inc.	0.56%	0.47%

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Investment Analysis

SCHE

Pros

The fund charges a slightly lower expense ratio of 0.06% compared to the alternative.
It manages substantial net assets of $12.9 billion, indicating robust investor demand.
A dividend yield of 2.54% suggests an attractive income component for emerging market holdings.

Considerations

The specific index tracked is not available, limiting transparency regarding methodology.
Top holding weights are modest at under 0.6%, which may limit conviction in specific stocks.
Sector weights are not available, preventing detailed assessment of industry diversification risks.

SPEM

Pros

The fund has a longer track record with an inception date of March 2007.
It holds larger net assets of $17.7 billion, potentially enhancing liquidity and stability.
Top holdings include diverse names like ICICI Bank and UMC, offering varied exposure.

Considerations

The expense ratio of 0.07% is marginally higher than the cheaper alternative fund.
The dividend yield of 2.43% is slightly lower than the competing emerging markets fund.
Sector weights are not available, obscuring the precise breakdown of economic exposure.

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About SCHE and SPEM

SCHE (SCHE)

Schwab Emerging Markets Equity ETF (SCHE) is a passively managed exchange-traded fund that provides broad exposure to large- and mid-cap companies in emerging-market economies. It aims to give investors a cost-efficient route to participate in the growth potential of developing markets, with holdings spread across sectors such as financials, technology and energy — though country and sector weightings can shift with market movements. Benefits include international diversification and typically lower fees than many active strategies; drawbacks include higher volatility, currency fluctuations and political or regulatory risks common to emerging markets. SCHE can form part of a diversified, long-term portfolio for investors seeking international growth exposure, but it is not suitable for those needing short-term capital preservation. This is general educational information, not personal financial advice; values can fall as well as rise and past performance is not a reliable guide to future results.

SPEM (SPEM)

The SPDR Portfolio Emerging Markets ETF (SPEM) is designed to provide investors with broad exposure to emerging market economies. It seeks to track the investment results of an index composed of emerging market equities. With net assets of USD 17.71 billion and over 2,800 holdings, it offers diversified access to a wide range of companies across various emerging sectors. The fund maintains a low expense ratio of 0.07%, which can help minimise costs for long-term investors. It has a dividend yield of 2.43%, offering a component of income alongside potential growth. Launched in March 2007, this ETF is suitable for those looking to gain a foothold in global markets, though it carries the inherent risks associated with investing in emerging economies, including volatility and regulatory changes.

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SCHE vs SPEM

Fund Snapshot