Investors seeking broad international equity exposure can choose between two widely held exchange-traded funds: Vanguard Total World Stock ETF and Schwab International Equity ETF. The funds take markedly different approaches—Vanguard covers global stocks including the United States, while Schwab focuses on developed markets outside the U.S.—and those design choices show up in cost, income profile, and how the portfolios have behaved over time.
Key takeaways
- Cost: Schwab International Equity ETF charges 0.03% in expenses versus 0.06% for Vanguard Total World Stock ETF.
- Income: Schwab’s trailing dividend yield is 2.95%, notably higher than Vanguard’s 1.59%.
- Performance: Over the past year (as of July 2, 2026), Schwab returned 28.32% compared with 23.07% for Vanguard.
- Risk/behavior: Over five years, Schwab saw a larger maximum drawdown ((29.14%)) than Vanguard ((26.39%)), consistent with a narrower mandate.
- Implication: The choice hinges on whether you want a single-fund global holding (Vanguard) or a U.S.-excluded developed ex-U.S. sleeve to complement a separate U.S. allocation (Schwab).
What’s in each fund
Vanguard Total World Stock ETF tracks the FTSE Global All Cap Index and holds 10,024 stocks across both developed and emerging markets. Technology is its largest sector weight at 31.1%, followed by financial services at 15.2% and industrials at 11.4%. Among its largest positions are Nvidia (about 4.2%), Apple (about 3.8%), and Microsoft (about 2.8%). Vanguard launched the ETF in 2008.
Schwab International Equity ETF tracks the FTSE Developed ex US Index and holds 1,500 stocks, explicitly excluding U.S. equities. Its sector mix tilts toward financial services at 23.3%, industrials at 18.1%, and technology at 17.6%. Key holdings include Samsung Electronics (about 3.3%), SK Hynix (about 2.8%), and ASML Holding (about 2.1%). Schwab launched the ETF in 2009.
Cost, yield, and the return profile
Both ETFs are positioned as low-cost options, but Schwab has the pricing advantage. Schwab International Equity ETF’s expense ratio is 0.03%, versus 0.06% for Vanguard Total World Stock ETF.
On income, Schwab also stands out. Its dividend yield is reported at 2.95%, compared with 1.59% for Vanguard. That difference aligns with the funds’ geography: developed international markets tend to have stronger dividend characteristics than U.S. equities, and Schwab’s exclusion of U.S. stocks structurally tilts its payout profile higher.
In performance metrics provided as of July 2, 2026, Schwab posted a stronger trailing one-year total return of 28.32%, while Vanguard returned 23.07% over the same period. Over five years, the funds’ drawdown profiles differed: Schwab’s maximum drawdown over five years was (29.14%) versus (26.39%) for Vanguard.
Market behavior and what investors should infer
The reported beta figures suggest different sensitivities to broad market moves. Schwab’s beta is 1.03 compared with Vanguard’s 0.98, implying Schwab has been slightly more responsive to movements correlated with the S&P 500. Neither beta indicates dramatically defensive or aggressive behavior, but taken alongside the deeper maximum drawdown in the five-year window, Schwab appears to have exhibited a more pronounced downside at its worst points.
Another practical distinction is concentration in the investable opportunity set. Vanguard’s global all-cap approach includes U.S. exposure, which can dampen volatility relative to an ex-U.S.-only mandate by broadening the mix across regions. Schwab’s exclusion of U.S. companies means it relies entirely on developed international markets for diversification, which can change the direction and magnitude of returns during periods when U.S. and non-U.S. equity factors diverge.
Despite these differences, the funds delivered similar end results over the five-year span based on the “growth of $1,000” metric cited in the source material: Schwab’s $1,000 grew to $1,615, while Vanguard’s grew to $1,654. The closeness of that comparison suggests that, over longer horizons, broad global coverage versus developed ex-U.S. specialization can converge in cumulative outcomes even with different volatility paths.
Bigger picture: how to choose
For portfolio construction, the decision is less about which ETF is “better” and more about the job you want the position to do. Vanguard Total World Stock ETF is designed as a near-complete global equities exposure vehicle: one holding delivers exposure to nearly every major publicly traded company segment included in its benchmark, including U.S. stocks.
Schwab International Equity ETF is typically used as a complement rather than a stand-alone global solution. Because it excludes U.S. equities, investors who already own a U.S.-focused allocation may use Schwab to extend diversification internationally without duplicating U.S. exposure.
Looking ahead, investors may want to monitor how global equity earnings and currency moves affect developed-market returns, particularly as rate expectations and inflation trends influence valuation across regions. With that in mind, the next catalysts to watch would include upcoming corporate earnings updates within major holdings across both U.S. and developed ex-U.S. markets, as well as scheduled macro data releases that could shift expectations for interest rates.
