QUAL vs VEA: Correlation & Overlap
How closely do iShares MSCI USA Quality Factor ETF (QUAL) and Vanguard FTSE Developed Markets ETF (VEA) trade together? Their weekly returns over three years give a correlation of 0.74, which is strong. By holdings, the two funds overlap 0.1% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QUAL and VEA?
On 3 years of weekly data the QUAL/VEA correlation comes out at 0.74, strong. Recent behaviour matches the longer record: 0.79 over 1 year against 0.74 over 3. The 5-year figure is 0.78, and annualized covariance runs at 157.0 %².
Among the 106 assets we track against QUAL, VEA ranks #33 by 3-year correlation. On 12-month performance VEA holds a 8.8-point edge, +19.7% against +28.5%. The link looks structural: the rolling one-year correlation barely moved, holding between 0.65 and 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.
QUAL vs VEA: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | VEA (Vanguard FTSE Developed Markets ETF) | |
|---|---|---|
| 1-year return | +19.7% | +28.5% |
| 5-year return | +68.0% | +63.5% |
| Volatility (ann.) | 14.0% | 15.1% |
| Beta vs S&P 500 | 0.93 | 0.79 |
| Max drawdown (3Y) | -18.0% | -13.5% |
| Dividend yield | 0.86% | 2.56% |
| Expense ratio | 0.15% | 0.03% |
| Assets under management | $46.5B | $314.9B |
| Sector / category | ETF · US Style | ETF · International |
QUAL is a Large Blend fund from iShares: $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield. VEA is a Foreign Large Blend fund from Vanguard: $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield.
Portfolio overlap between QUAL and VEA
The two portfolios are largely distinct: 0.1% of the funds' weight sits in the same underlying holdings (10 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in QUAL | Weight in VEA |
|---|---|---|
| MRK | 1.44% | 0.07% |
| AMP | 0.24% | 0.02% |
| BBY | 0.34% | 0.02% |
| ADP | 1.22% | 0.02% |
| TW | 0.04% | 0.01% |
| HAL | 0.09% | 0.01% |
| PHM | 0.42% | 0.00% |
| RF | 0.08% | 0.00% |
| EXE | 0.08% | 0.00% |
| LIN | 1.02% | 0.00% |
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%). Only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 10 common positions shown.
Year-by-year returns
| Year | QUAL | VEA |
|---|---|---|
| 2022 | -20.5% | -15.3% |
| 2023 | +30.9% | +17.9% |
| 2024 | +22.3% | +3.1% |
| 2025 | +12.7% | +35.2% |
| 2026 | +13.5% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and VEA good diversifiers for each other?
Only partially. A correlation of 0.74 means QUAL and VEA share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between QUAL and VEA?
Using weekly returns as of 2026-08-27: 0.74 over 3 years, with 0.79 over the last year and 0.78 over 5 years.
Is VEA a good diversifier for QUAL?
Only partially. A correlation of 0.74 means QUAL and VEA share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do QUAL and VEA overlap?
The two funds share 10 holdings amounting to 0.1% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qual-vs-vea.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/qual-vs-vea/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: QUAL correlations · VEA correlations
