IWM vs QUAL: Correlation & Overlap
How closely do iShares Russell 2000 ETF (IWM) and iShares MSCI USA Quality Factor ETF (QUAL) trade together? Their weekly returns over three years give a correlation of 0.76, which is strong. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and QUAL?
On 3 years of weekly data the IWM/QUAL correlation comes out at 0.76, strong. Little has changed lately, as the 1-year reading of 0.80 lands near the 3-year figure. The 5-year figure is 0.81, and annualized covariance runs at 209.8 %².
Within IWM's tracked universe of 320 assets, QUAL comes in at #24 by 3-year correlation. Over the last 12 months IWM came out ahead by 8.7 percentage points (+28.4% against +19.7%). The rolling one-year correlation moved between 0.50 and 0.89 over the past three years, a moderate range.
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.
IWM vs QUAL: side by side
| IWM (iShares Russell 2000 ETF) | QUAL (iShares MSCI USA Quality Factor ETF) | |
|---|---|---|
| 1-year return | +28.4% | +19.7% |
| 5-year return | +41.5% | +68.0% |
| Volatility (ann.) | 19.8% | 14.0% |
| Beta vs S&P 500 | 1.06 | 0.93 |
| Max drawdown (3Y) | -27.5% | -18.0% |
| Dividend yield | 0.91% | 0.86% |
| Expense ratio | 0.19% | 0.15% |
| Assets under management | $80.1B | $46.5B |
| Sector / category | ETF · US Small & Mid Cap | ETF · US Style |
IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% 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 IWM and QUAL
The two portfolios are largely distinct. Weighing the shared positions, 0% of the two funds is identical, spread across 0 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%). 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.
Year-by-year returns
| Year | IWM | QUAL |
|---|---|---|
| 2022 | -20.5% | -20.5% |
| 2023 | +16.8% | +30.9% |
| 2024 | +11.4% | +22.3% |
| 2025 | +12.7% | +12.7% |
| 2026 | +22.3% | +13.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and QUAL good diversifiers for each other?
To a limited degree. At 0.76 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between IWM and QUAL?
Using weekly returns as of 2026-08-27: 0.76 over 3 years, with 0.80 over the last year and 0.81 over 5 years.
Is QUAL a good diversifier for IWM?
To a limited degree. At 0.76 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do IWM and QUAL overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-qual.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iwm-vs-qual/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: IWM correlations · QUAL correlations
