Why Retirees Are Quietly Moving From SCHD to These Two International Dividend ETFs Paying More Yield

There is a lot to like about the Schwab U.S. Dividend Equity ETF (NYSE:SCHD). At a 0.06% expense ratio, investors get what is essentially a high-quality, value-oriented multifactor ETF for almost nothing in fees. The fund has grown to over $120 billion in total assets, cementing its place as one of the largest dividend ETFs in the world.

SCHD tracks the Dow Jones U.S. Dividend 100 Index, which screens for quality rather than simply chasing the highest yields. Companies must have at least 10 consecutive years of dividend payments and are further evaluated on free cash flow to total debt, return on equity, dividend yield, and five-year dividend growth. That combination of income discipline and balance sheet rigor is what has kept SCHD popular through multiple market cycles. It is also worth noting that Schwab completed a 3-for-1 share split in October 2024, so any pre-split price comparisons need to be adjusted accordingly.

The income is respectable, and the 2026 total return has been remarkable. SCHD’s trailing 12-month yield currently runs near 3%, and on a total return basis the fund has dramatically outpaced the broader S&P 500 in 2026, with a year-to-date gain of roughly 33% compared to approximately 12% for the index. That wide margin reflects both a resurgence of the value factor and SCHD’s sector positioning: following its annual reconstitution, the fund entered 2026 with meaningful overweights in energy, consumer staples, and healthcare, all of which outperformed as growth stocks gave ground. SCHD remains a natural anchor for income-focused portfolios.

That said, international equities remain cheaper on most valuation metrics. If the goal is to roughly mirror the global stock market, around 30% to 40% of an equity portfolio would typically go toward international developed and emerging markets. Income investors who want that diversification do not have to sacrifice yield to get it.

Here are two international dividend ETFs that some income investors are choosing alongside, or instead of, SCHD.

Schwab International Dividend Equity ETF (SCHY)

The Schwab International Dividend Equity ETF (NYSE:SCHY) serves as SCHD’s global counterpart. The fund holds approximately $2.6 billion in assets under management and charges a very competitive 0.08% expense ratio, keeping it accessible for cost-conscious investors.

SCHY tracks the Dow Jones International Dividend 100 Index, applying many of the same quality screens used by SCHD: the 10-consecutive-year dividend payment requirement and financial-strength filters are both present. The result is a portfolio with a pronounced large-cap value tilt at noticeably cheaper valuations than its domestic sibling, trading at approximately 16 times earnings while still maintaining solid profitability. Price-to-book is also meaningfully lower. Over the past year, SCHY has delivered a total return of roughly 22%, capturing a broad rally in international equities that has been further supported by dollar weakness.

International companies also tend to pay higher dividends than their U.S. counterparts. SCHY’s 30-day SEC yield currently stands at approximately 3.82%, while the trailing 12-month distribution yield runs closer to 3.3%. One drawback worth understanding is taxes: international dividends are generally subject to foreign withholding taxes before reaching U.S. investors, which reduces the net yield slightly.

In taxable accounts, investors can often recover some or all of those withheld taxes through the foreign tax credit. The complexity is real but generally less punitive than many investors assume. Those who prefer to sidestep the issue entirely may want to hold SCHY inside a Roth IRA, where foreign tax credits cannot be claimed but qualified distributions are tax-free at withdrawal.

Amplify CWP International Enhanced Dividend Income ETF (IDVO)

For investors who want more income than SCHY provides, the Amplify CWP International Enhanced Dividend Income ETF (NYSE:IDVO) takes a different approach entirely. Unlike SCHY, IDVO is actively managed rather than index-based. It crossed $1 billion in assets under management in February 2026 and has since grown to approximately $1.4 billion, reflecting strong investor appetite for its income-plus-growth model.

The portfolio typically holds 30 to 50 American Depositary Receipts (ADRs) selected from the MSCI ACWI ex-U.S. universe. Managers evaluate holdings on earnings growth, free cash flow, dividend growth, return on equity, market capitalization, and management quality. That fundamental screen produces a portfolio of companies with genuine dividend-growth characteristics rather than simply the highest current payers.

The portfolio is then enhanced through a tactical covered call strategy. Rather than writing calls on a broad international index, the managers selectively write covered calls on individual holdings. That approach generally preserves more upside than traditional index-wide covered call strategies, while still generating meaningful option income on top of the underlying dividends.

The result is a distribution rate of approximately 6.1%, calculated by annualizing the most recent monthly distribution and dividing by net asset value. Despite offering a lower headline yield than many covered call ETFs, IDVO has posted strong total returns since its September 2022 launch. Morningstar awards IDVO a 5-star overall rating within the Derivative Income category, reflecting strong historical risk-adjusted returns. A Morningstar analyst review published in July 2026 acknowledged that the fund’s covered call approach “has been rewarded lately” while also flagging that reliance on manager skill introduces uncertainty about whether the edge can be sustained over the long run.

The primary drawback is cost. At a 0.65% expense ratio, IDVO is substantially more expensive than SCHY. Investors drawn to the fund should be prepared to hold it over the long term, giving its active strategy sufficient time to justify those higher fees through continued income generation and capital growth.

Editor’s note: SCHD’s total assets were updated to over $120 billion and its 2026 year-to-date outperformance over the S&P 500 was quantified at roughly 33% versus approximately 12% for the index. SCHY’s one-year total return was revised from roughly 20% to roughly 22%, and its portfolio P/E was updated from approximately 14 times to approximately 16 times. IDVO’s current AUM was refined to approximately $1.4 billion and its distribution rate confirmed at approximately 6.1% per Amplify’s own fund page as of October 31, 2026.

Contact [email protected] for any questions or corrections.