This is a passive ETF that tracks the Dow Jones International Dividend 100 Index. It holds 100 high-dividend stocks with sustainable dividends and sound finances from developed and emerging markets worldwide outside the US, weighted by adjusted market capitalization.

It suits long-term investors who want high-dividend income from international markets outside the US and want to add regional diversification to their portfolios.

Launched by Charles Schwab in 2021, it is a passively managed ETF that tracks an index.

Rather than simply ranking stocks by dividend yield, the index applies financial criteria such as dividend sustainability, cash flow and debt ratios to select the 100 non-US high-dividend stocks the fund holds. The index is rebalanced once a year, and a cap on each stock's weight limits concentration in any single holding.

• Stock selection criteria based on dividend sustainability and financial health
• Low expense ratio keeps the cost burden small

Assets under management (AUM) stand at $2.8B, and the expense ratio is 0.08% per year.

VYMI, in the same category, is managed by Vanguard and has a broader number of holdings and deeper liquidity, making it the larger of the two ETFs. SCHY reflects Schwab's low-fee policy, keeping the cost burden low, and the financial filters unique to the Dow Jones International Dividend 100 Index are an additional point of differentiation.

International dividend stocks tend to face currency headwinds when the dollar is strong, but they are structured to benefit relatively when the dollar weakens. With heavy weightings in energy and financials, short-term volatility can occur depending on how those sectors perform.

Interest in the international dividend ETF category as a whole has been sustained, alongside demand to reduce concentration in US equities and increase international diversification. As the interest rate environment eases, the relative appeal of dividend yields tends to rise.

Its low expense ratio and dividend sustainability based on financial filters are strengths, but currency exposure and country concentration risk need to be checked in advance.

VYMI, shown in the table, is managed by Vanguard and is an international dividend alternative with more holdings and higher liquidity. DFAI, DFIC and DFAX are international factor ETFs run by Dimensional with an active tilt, combining value and small-cap factors with dividends. VIGI is Vanguard's international dividend growth ETF, taking a different approach that prioritizes dividend growth over high yield. For those who want to add currency hedging to international dividends, HEFA is an option, and for broader developed-market exposure, EFA and VEA are also worth comparing.

Here are the points to review before investing in SCHY. Because currency, tax and regional risks affect returns in international dividend ETFs, it is important to check each item thoroughly before buying.

Currency fluctuation is the main short-term risk, and sector volatility from the concentration in energy and financials, along with geopolitical risk from the inclusion of some emerging markets, should also be considered. Investors based in Korea should also check whether foreign withholding tax could result in double taxation.

It is a reasonable choice for investors who want international high-dividend exposure outside the US at low cost. If you want more holdings and higher liquidity, we recommend comparing it with VYMI, and with VIGI if dividend growth is your priority.