MFEM vs SCHQ
PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF vs Schwab Long-Term US Treasury ETF
Quick Verdict
SCHQ has a lower expense ratio. MFEM delivered stronger 1-year returns. MFEM offers more diversification with 701 holdings.
Side-by-Side Comparison
| Metric | MFEM | SCHQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.03% | |
| AUM | $156M | $803M | |
| Dividend Yield | 2.39% | 4.91% | |
| Holdings | 701 | 100 | |
| YTD Return | +21.80% | -2.72% | |
| 1Y Return | +33.81% | +0.09% | |
| 3Y Return (annualized) | +20.43% | +0.91% | |
| 5Y Return (annualized) | +8.97% | -7.20% | |
| Volatility (annualized) | 17.7% | 13.5% | |
| Max Drawdown | -45.3% | -46.7% | |
| Fund Family | PIMCO (US) | Charles Schwab Asset Management | |
| Category | Equity | Fixed Income | |
| Inception | Aug 31, 2017 | Oct 10, 2019 |
MFEM vs SCHQ Performance
PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (MFEM) is a ETF from PIMCO (US) and Schwab Long-Term US Treasury ETF (SCHQ) is a ETF from Charles Schwab Asset Management. Over the past year MFEM returned +33.81% while SCHQ returned +0.09%. Year to date, MFEM is up 21.80% versus a loss of 2.72% for SCHQ.
Over three years, MFEM compounded at +20.43% per year against +0.91% for SCHQ; over five years the annualized figures are +8.97% and -7.20% respectively. Across the full 7-year window we track, MFEM has the edge at +6.84% annualized vs -4.41%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
MFEM has been the more volatile fund, with annualized monthly volatility of 17.7% compared with 13.5% for SCHQ. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -45.3% for MFEM and -46.7% for SCHQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.26. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MFEM charges 0.49% per year while SCHQ charges 0.03%. On a $10,000 position that is $49 vs $3 annually, a gap of $46 per year that compounds over a long holding period. On income, MFEM currently yields 2.39% against 4.91% for SCHQ.
Holdings Overlap
MFEM and SCHQ share 0 holdings out of 595 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MFEM or SCHQ?
MFEM has an expense ratio of 0.49% while SCHQ charges 0.03%. SCHQ is the cheaper option. On a $10,000 investment, that is $46 per year of difference.
Which performed better, MFEM or SCHQ?
Over the past year MFEM returned +33.81% vs +0.09% for SCHQ, so MFEM leads on 1-year performance. Over the longest common window we track (7 years), MFEM annualized +6.84% vs -4.41% for SCHQ. Past performance does not guarantee future results.
Which is riskier, MFEM or SCHQ?
MFEM has been the more volatile fund at 17.7% annualized versus 13.5% for SCHQ. Worst drawdown: MFEM -45.3% vs SCHQ -46.7%.
Should I hold both MFEM and SCHQ?
MFEM and SCHQ have a monthly-return correlation of 0.26, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MFEM and SCHQ?
MFEM and SCHQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 595 unique securities.
Which pays a higher dividend, MFEM or SCHQ?
MFEM yields 2.39% while SCHQ yields 4.91%, so SCHQ currently pays the higher dividend yield.
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