QUAL vs SPY: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI USA Quality Factor ETF (QUAL) and SPDR S&P 500 ETF Trust (SPY) carry a correlation of 0.97, a very strong link. Looking through to holdings, 44.3% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QUAL and SPY?
Over the past 3 years, QUAL and SPY moved with a correlation of 0.97, which is very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.93 over 1 year against 0.97 over 3. Over 5 years the correlation is 0.98, and the annualized covariance of weekly returns is 195.2 %².
Few assets follow QUAL as closely as SPY, which ranks #2 of 106 tracked partners. Twelve-month performance is nearly a tie, at +19.7% for QUAL and +20.6% for SPY. The rolling one-year correlation stayed in a tight band between 0.93 and 0.99 over the past three years, which points to a structural rather than episodic relationship.
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 SPY: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +19.7% | +20.6% |
| 5-year return | +68.0% | +82.4% |
| Volatility (ann.) | 14.0% | 14.5% |
| Beta vs S&P 500 | 0.93 | 1.00 |
| Max drawdown (3Y) | -18.0% | -18.8% |
| Dividend yield | 0.86% | 1.01% |
| Expense ratio | 0.15% | 0.09% |
| Assets under management | $46.5B | $795.3B |
| Sector / category | ETF · US Style | ETF · US Large Cap |
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. SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Portfolio overlap between QUAL and SPY
The two portfolios overlap heavily, with 117 holdings in common adding up to 44.3% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in QUAL | Weight in SPY |
|---|---|---|
| AAPL | 6.62% | 6.96% |
| NVDA | 6.00% | 7.68% |
| MSFT | 7.51% | 5.58% |
| GOOGL | 1.93% | 3.03% |
| META | 3.75% | 1.91% |
| GOOG | 1.52% | 2.42% |
| LLY | 3.72% | 1.42% |
| BRK.B | 1.79% | 1.40% |
| XOM | 2.18% | 0.99% |
| JNJ | 2.13% | 0.98% |
| V | 3.26% | 0.96% |
| MA | 2.34% | 0.73% |
| WMT | 0.91% | 0.69% |
| COST | 1.09% | 0.64% |
| LRCX | 3.66% | 0.59% |
Largest positions held only by QUAL: CDE (0.12%), FN (0.09%), GGG (0.09%), UTHR (0.07%), RPM (0.05%). Only by SPY: AMZN (3.85%), AVGO (2.55%), MU (1.60%), TSLA (1.47%), JPM (1.44%).
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 | SPY |
|---|---|---|
| 2022 | -20.5% | -18.2% |
| 2023 | +30.9% | +26.2% |
| 2024 | +22.3% | +24.9% |
| 2025 | +12.7% | +17.7% |
| 2026 | +13.5% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and SPY good diversifiers for each other?
No: a correlation of 0.97 means QUAL and SPY tend to fall together, which is precisely when diversification is supposed to help. On top of that, 44.3% of their holdings are the same, making the doubling-up even more literal.
FAQ
What is the correlation between QUAL and SPY?
Using weekly returns as of 2026-08-27: 0.97 over 3 years, with 0.93 over the last year and 0.98 over 5 years.
Is SPY a good diversifier for QUAL?
No: a correlation of 0.97 means QUAL and SPY tend to fall together, which is precisely when diversification is supposed to help. On top of that, 44.3% of their holdings are the same, making the doubling-up even more literal.
How much do QUAL and SPY overlap?
44.3% by weight, across 117 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: QUAL correlations · SPY correlations
