VXUS vs SCHF: Which Should You Pick?
VXUS holds emerging markets and small caps; SCHF holds neither. At August 2026, 26% of VXUS was emerging markets. Which to own, and why SCHF led since 2011.
VXUS and SCHF both hold thousands of non-U.S. stocks for a few basis points a year, so they show up side by side in screeners as if they were substitutes. They own different slices of the world. VXUS tracks the FTSE Global All Cap ex US Index: developed and emerging markets, large companies through small ones. SCHF tracks the FTSE Developed ex US Index: large and mid-size companies in developed countries only. At August 31, 2026, 26.2% of VXUS sat in emerging markets. SCHF holds none.
Quick answer
If you want one fund for everything outside the U.S., buy VXUS. It costs 0.02 points a year more, which is $20 on $100,000, and it holds the emerging markets and small companies SCHF leaves out. Pick SCHF only when you mean to own developed large and mid caps by themselves, usually because a separate fund covers emerging markets. SCHF did return more from 2011 to 2026, because emerging markets lagged in that stretch. That record shows which region did better in those years.
| VXUS | SCHF | |
|---|---|---|
| Expense ratio | 0.05% | 0.03% |
| Index | FTSE Global All Cap ex US | FTSE Developed ex US |
| Holdings | 8,790 | 1,441 |
| Emerging markets | 26.2% | None |
| Company size | Large, mid and small | Large and mid |
| Largest country | Japan, 15.4% | Japan, 20.9% |
| South Korea | 7.5% | 10.3% |
| Annual return, 2011 to Sept 2026 | 6.55% | 7.20% |
| 2025 dividends qualified | 58.5% | 72.5% |
| Foreign tax credit passed through (2025) | Yes | Yes |
Vanguard and Schwab product pages and fact sheets. VXUS holdings and region mix at August 31, 2026; SCHF holdings at October 7, 2026; country weights at June 30, 2026. Returns are Summitward calculations from daily total-return prices, January 31, 2011 to September 30, 2026.
What SCHF leaves out
Two segments are missing from SCHF. The first is emerging markets: China, Taiwan, India, Brazil and the rest of FTSE’s emerging list, about a quarter of VXUS. The second is small companies in developed countries. In VXUS’s market-cap breakdown at August 31, 2026, 7.6% was small and another 6.0% medium-small.
Country lists can mislead here. FTSE classifies South Korea as a developed market, so Samsung and the rest of Korea’s large companies are in SCHF, where Korea was 10.3% of the fund at June 30, 2026. MSCI’s indexes treat Korea as emerging, as of its June 2026 review. FTSE also moved Greece to developed status on September 21, 2026. When a ticker list says “developed,” check whose definition it uses.
Schwab investors can rebuild most of VXUS from three Schwab funds: SCHF, SCHE for emerging large and mid caps, and SCHC for developed small caps, which both cost 0.06% since June 11, 2026. That mix still omits small companies in emerging markets, because neither SCHE nor SCHC holds them. Three funds also means three weights to rebalance.
Why cover the whole market
The case for VXUS comes from diversification, and from not betting on which region will lead next. Owning every investable market in proportion to its size is the default that needs no forecast. Leaving out a quarter of the non-U.S. market is an active bet against it, whether or not the buyer meant to make one.
The case does not depend on a size or emerging-markets premium. Fama and French found no size premium in any region they studied from November 1990 to March 2011. Small companies earn their place in VXUS because they are part of the market, and their weight is small. The argument for emerging markets is the same: they are a quarter of the investable non-U.S. market. Our emerging markets allocation guide covers the evidence on how much to hold and why.
What the history shows
From January 2011, when VXUS launched, to September 2026, SCHF returned 7.20% a year and VXUS 6.55%, a gap of 0.65 points a year. In rolling five-year windows over that period, VXUS was ahead in 20% of them. Monthly returns were 0.99 correlated, and the two funds fell about the same amount from January 2018 to March 2020: 36.0% for VXUS and 34.9% for SCHF.
Most of the gap comes from emerging markets having a weak decade and a half, and it moved with them. In 2013 VXUS trailed by 4.4 points; in 2016, 2017 and 2024 it led by 1.4 to 1.8 points. Fifteen years of one region trailing does not show that it will keep trailing: the S&P 500 lost 9% over 2000 through 2009, then outpaced international stocks from 2010 through 2024.
Taxes in a brokerage account
Both funds passed foreign taxes through to shareholders for 2025, so either one lets you claim the foreign tax credit in a taxable account. Up to $300 of foreign tax ($600 married filing jointly), reported on a 1099-DIV, you can claim it without Form 1116. SCHF’s dividends were more often qualified in 2025, 72.5% against 58.5%. On a 3% yield the difference is a few dollars per $10,000 a year. In an IRA, neither the credit nor the qualified rate applies.
Check what your allocation says
If SCHF is your only international fund, enter your mix with 0% in emerging markets and compare it with a market-weight mix.
Who should pick which
Pick VXUS if you
- Want one fund for all non-U.S. stocks.
- Pair it with a U.S. total-market fund in a two- or three-fund portfolio.
- Would rather not choose between regions.
Pick SCHF if you
- Already hold an emerging-markets fund and want developed markets separately.
- Want to set the emerging-markets weight yourself.
- Already own it with gains in a taxable account; add an emerging-markets fund instead of selling.
Sources and related reading
- Vanguard, VXUS product page (holdings, region and size mix, August 31, 2026) and fact sheet (June 30, 2026).
- Schwab Asset Management, SCHF, SCHE and SCHC product pages (October 7, 2026), and 2025 foreign tax credit and qualified dividend tables.
- FTSE Russell, country classification update (September 2026).
- Vanguard, 2025 qualified dividend income; IRS Publication 514, foreign tax credit.
- Eugene Fama and Kenneth French, “Size, Value, and Momentum in International Stock Returns,” Journal of Financial Economics 105(3), 2012, p. 460.
- VXUS vs IXUS, VT vs VTI plus VXUS, how much to hold in emerging markets, and the case for global diversification.
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