IGRO vs SCHY: Which Is the Better Pick in 2026?

Overview

IGRO and SCHY are both international dividend-equity ETFs, but they take meaningfully different approaches to selecting stocks. IGRO tracks the Morningstar Global ex-US Dividend Growth Index, which emphasizes companies with consistent dividend-growth histories and low payout ratios (below 75%), explicitly excluding high-yield names. SCHY tracks the Dow Jones International Dividend 100 Index, a more yield-focused strategy that selects the highest-paying dividend stocks from developed markets outside the U.S. The key distinction: IGRO prioritizes dividend stability and growth potential, while SCHY prioritizes current income.

How they differ

SCHY yields 4.37% against IGRO's 1.87% — a gap driven by their opposite selection philosophies. IGRO screens out the top decile of high-yield payers and requires payout ratios below 75%, naturally keeping yield moderate while filtering for stocks with room to raise dividends. SCHY's "100 Index" construction concentrates on the highest-yielding names, which typically have higher payout ratios and less growth runway.

SCHY is also cheaper: 0.08% versus 0.15%, and holds $2.60B in assets compared to $1.28B for IGRO. IGRO has an older inception date (05/17/2016) versus SCHY (04/29/2021), though SCHY has grown larger despite being younger. Both carry similar beta — 0.73 and 0.81 — suggesting comparable market sensitivity to their international equity exposures, though IGRO's lower beta hints at slightly less volatility from its dividend-stability filter.

Who each is best for

• IGRO: Fits investors seeking international dividend exposure with emphasis on compound growth and reinvestment, comfortable with lower current yields in exchange for companies likely to raise payouts over time.

• SCHY: Fits investors prioritizing current income from non-U.S. stocks and willing to accept higher turnover in underlying holdings and potentially less dividend-growth visibility to capture higher yields today.

Key risks to know

• Concentration in high-dividend stocks (SCHY): By construction, SCHY selects the 100 highest-yielding international dividend payers. This concentration in elevated-yield names carries elevated duration and credit risk; if these companies face earnings pressure or dividend cuts, downside can be sharp.

• Dividend sustainability and payout pressure (both): International dividend stocks have faced structural headwinds in recent years. Higher tax regimes in some markets, labor inflation, and currency volatility all pressure payout capacity. SCHY's higher payout ratios (implicit in its higher yield) leave less margin for error.

• Beta divergence and growth trade-off: IGRO's lower beta and dividend-growth screen may cause it to underperform in periods when high-yield international stocks rally sharply. Conversely, SCHY's yield-focused tilt may lag in markets where dividend-growth stories outperform.

• Currency and emerging-market exposure: Both funds hold international equities; IGRO's "global ex-U.S." scope includes emerging markets, while SCHY's Dow Jones index leans developed. Currency fluctuations and geopolitical events in either region can drive performance divergence independent of dividend policy.

Bottom line

If you value dividend growth and a lower distribution rate paired with companies likely to raise payments, IGRO's growth-oriented screening stands out; if you prioritize current income and accept lower payout sustainability in exchange for higher yields, SCHY's yield-centric index offers more upfront cash. Both carry international equity risk and depend on dividend sustainability in uncertain economic environments — past performance does not predict future results.