IEFA vs QUAL: Correlation & Overlap
iShares Core MSCI EAFE ETF (IEFA) and iShares MSCI USA Quality Factor ETF (QUAL) show a strong relationship: their 3-year correlation of weekly returns is 0.74. By holdings, the two funds overlap 0.2% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEFA and QUAL?
Over the past 3 years, IEFA and QUAL moved with a correlation of 0.74, which is strong. Recent behaviour matches the longer record: 0.80 over 1 year against 0.74 over 3. Over 5 years the correlation is 0.78, and the annualized covariance of weekly returns is 155.4 %².
Among the 111 assets we track against IEFA, QUAL ranks #32 by 3-year correlation. Twelve-month performance is nearly a tie, at +21.8% for IEFA and +19.7% for QUAL. Stability stands out here, with the rolling one-year correlation confined to 0.62 through 0.83.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
IEFA vs QUAL: side by side
| IEFA (iShares Core MSCI EAFE ETF) | QUAL (iShares MSCI USA Quality Factor ETF) | |
|---|---|---|
| 1-year return | +21.8% | +19.7% |
| 5-year return | +54.5% | +68.0% |
| Volatility (ann.) | 15.0% | 14.0% |
| Beta vs S&P 500 | 0.77 | 0.93 |
| Max drawdown (3Y) | -13.8% | -18.0% |
| Dividend yield | 3.35% | 0.86% |
| Expense ratio | 0.07% | 0.15% |
| Assets under management | $190.1B | $46.5B |
| Sector / category | ETF · International | ETF · US Style |
On the fund side, IEFA sits in the Foreign Large Blend category at iShares, with $190.1B under management, 1620 holdings, a 0.07% expense ratio, a 3.35% trailing dividend yield. QUAL, iShares's Large Blend fund, carries $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield.
Portfolio overlap between IEFA and QUAL
The two portfolios are largely distinct, with 7 holdings in common adding up to 0.2% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in IEFA | Weight in QUAL |
|---|---|---|
| MRK | 0.08% | 1.44% |
| AMP | 0.03% | 0.24% |
| BBY | 0.02% | 0.34% |
| TW | 0.02% | 0.04% |
| ADP | 0.02% | 1.22% |
| PHM | 0.01% | 0.42% |
| RF | 0.01% | 0.08% |
Largest positions held only by IEFA: ASML (2.57%), HSBA (1.35%), ROP (1.22%), SAN (1.17%), NOVN (1.10%). Only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 7 common positions shown.
Year-by-year returns
| Year | IEFA | QUAL |
|---|---|---|
| 2022 | -15.2% | -20.5% |
| 2023 | +18.0% | +30.9% |
| 2024 | +3.3% | +22.3% |
| 2025 | +32.1% | +12.7% |
| 2026 | +14.5% | +13.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEFA and QUAL good diversifiers for each other?
Somewhat, no more. With 0.74 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between IEFA and QUAL?
Using weekly returns as of 2026-08-27: 0.74 over 3 years, with 0.80 over the last year and 0.78 over 5 years.
Is QUAL a good diversifier for IEFA?
Somewhat, no more. With 0.74 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do IEFA and QUAL overlap?
The two funds share 7 holdings amounting to 0.2% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iefa-vs-qual.json
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Related comparisons
Hubs: IEFA correlations · QUAL correlations
