QUAL vs SCHD: Correlation & Overlap
How closely do iShares MSCI USA Quality Factor ETF (QUAL) and Schwab US Dividend Equity ETF (SCHD) trade together? Their weekly returns over three years give a correlation of 0.62, which is strong. The two funds also share 8.5% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QUAL and SCHD?
Across a 3-year window, the weekly returns of QUAL and SCHD correlate at 0.62, strong. The link has loosened recently: the 1-year correlation (0.37) runs below the 3-year figure (0.62). Stretching to 5 years gives 0.76, with an annualized covariance of 111.8 %².
Among the 106 assets we track against QUAL, SCHD ranks #45 by 3-year correlation. Over the last 12 months SCHD came out ahead by 9.9 percentage points (+19.7% against +29.6%). The rolling one-year correlation moved between 0.42 and 0.86 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.
QUAL vs SCHD: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | SCHD (Schwab US Dividend Equity ETF) | |
|---|---|---|
| 1-year return | +19.7% | +29.6% |
| 5-year return | +68.0% | +60.9% |
| Volatility (ann.) | 14.0% | 12.9% |
| Beta vs S&P 500 | 0.93 | 0.52 |
| Max drawdown (3Y) | -18.0% | -16.1% |
| Dividend yield | 0.86% | 3.13% |
| Expense ratio | 0.15% | 0.06% |
| Assets under management | $46.5B | $104.2B |
| Sector / category | ETF · US Style | ETF · Dividend |
On the fund side, QUAL sits in the Large Blend category at iShares, with $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield. SCHD, Schwab ETFs's Large Value fund, carries $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% trailing dividend yield.
Portfolio overlap between QUAL and SCHD
The two portfolios are largely distinct, with 17 holdings in common adding up to 8.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in QUAL | Weight in SCHD |
|---|---|---|
| MRK | 1.44% | 4.92% |
| ADP | 1.22% | 2.73% |
| LMT | 0.91% | 2.79% |
| KO | 0.82% | 4.22% |
| PG | 0.81% | 3.81% |
| ACN | 0.73% | 2.70% |
| FAST | 0.53% | 1.43% |
| PEP | 0.36% | 3.68% |
| BBY | 0.34% | 0.42% |
| PAYX | 0.31% | 0.98% |
| EOG | 0.31% | 1.87% |
| SLB | 0.31% | 1.95% |
| DVN | 0.17% | 1.31% |
| TROW | 0.09% | 0.59% |
| RF | 0.08% | 0.64% |
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%). Only by SCHD: ABT (4.83%), AMGN (4.80%), VZ (3.97%), HD (3.94%), UNH (3.92%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | QUAL | SCHD |
|---|---|---|
| 2022 | -20.5% | -3.3% |
| 2023 | +30.9% | +4.5% |
| 2024 | +22.3% | +11.7% |
| 2025 | +12.7% | +4.3% |
| 2026 | +13.5% | +29.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and SCHD good diversifiers for each other?
To a limited degree. At 0.62 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 QUAL and SCHD?
Using weekly returns as of 2026-08-27: 0.62 over 3 years, with 0.37 over the last year and 0.76 over 5 years.
Is SCHD a good diversifier for QUAL?
To a limited degree. At 0.62 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 QUAL and SCHD overlap?
The two funds share 17 holdings amounting to 8.5% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qual-vs-schd.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/qual-vs-schd/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: QUAL correlations · SCHD correlations
