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

I have a soft spot for the Schwab U.S. Dividend Equity ETF (SCHD). With a decently low 0.06% expense ratio, investors get what is essentially a high-quality, value-oriented multifactor ETF.

It tracks the Dow Jones U.S. Dividend 100 Index, which doesn’t simply chase the highest yields. Companies must have at least 10 consecutive years of dividend payments and are further screened on metrics including free cash flow to total debt, return on equity, dividend yield, and five-year dividend growth.

The income is respectable too. As of the latest data, SCHD offers a 3.35% 30-day SEC yield while trading at a relatively reasonable 19.07 times earnings, making it noticeably cheaper than the broader S&P 500 index.

That said, international equities remain cheaper still. And if your goal is to roughly mirror the global stock market, around 30% to 40% of an equity portfolio would typically be allocated to international developed and emerging markets. However, investors who want to maintain a dividend focus don’t necessarily have to sacrifice income to achieve that diversification.

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 (SCHY) serves as SCHD’s global counterpart. The fund has grown to nearly $2.3 billion in assets under management and has lowered its expense ratio to a very competitive 0.08%.

SCHY tracks the Dow Jones International Dividend 100 Index, applying many of the same quality screens used by SCHD. The result is a portfolio with a pronounced large-cap value tilt, but at noticeably cheaper valuations. The portfolio currently trades at approximately 15.2 times earnings, compared with 19.07 for SCHD, while still maintaining strong profitability with a 22.15% return on equity versus 26.54% for SCHD. Price-to-book is also lower at 2.61, compared with 3.84.

International companies also tend to pay somewhat higher dividends than their U.S. counterparts. As a result, SCHY currently offers a 3.89% 30-day SEC yield, but one drawback is taxes. International dividends are generally subject to foreign withholding taxes before reaching U.S. investors.

In taxable accounts, investors can often recover some or all of those taxes through the foreign tax credit, reducing the overall impact. While this adds a bit more complexity than owning domestic dividend ETFs, it is generally not as punitive as many investors assume. Those who prefer to avoid the issue altogether may choose to prioritize SCHY inside a Roth IRA.

Amplify CWP International Enhanced Dividend Income ETF (IDVO)

If SCHY’s 3.89% yield isn’t high enough, investors seeking more income may want to consider the Amplify CWP International Enhanced Dividend Income ETF (IDVO). Unlike SCHY, IDVO is actively managed rather than index-based.

The portfolio typically holds 30 to 50 American Depositary Receipts (ADRs) selected from the MSCI ACWI ex-U.S. universe. Companies are evaluated based on earnings growth, free cash flow, dividend growth, return on equity, market capitalization, and management quality.

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

The result is a current 5.94% distribution rate, calculated by annualizing the most recent monthly distribution and dividing it by the fund’s net asset value. Despite offering a lower headline yield than many covered call ETFs, IDVO has delivered impressive total returns.

Over the three-year period ending June 30, 2026, the fund compounded at an annualized 21.88%, assuming distributions were reinvested. According to Morningstar, that performance earns IDVO a 5-star rating within the 82-fund Derivative Income category, reflecting strong historical risk-adjusted returns.

The primary drawback is cost. At a 0.65% expense ratio, IDVO is substantially more expensive than SCHY. Investors considering the fund should be prepared to hold it over the long term to give its active strategy time to justify those higher fees.

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