QUAL vs VNQ: Correlation & Overlap
How closely do iShares MSCI USA Quality Factor ETF (QUAL) and Vanguard Real Estate ETF (VNQ) trade together? Their weekly returns over three years give a correlation of 0.55, which is moderate. Looking through to holdings, 1.5% 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 VNQ?
Over the past 3 years, QUAL and VNQ moved with a correlation of 0.55, which is moderate. The past 12 months show a weaker link (0.43) than the 3-year average (0.55). Over 5 years the correlation is 0.70, and the annualized covariance of weekly returns is 126.3 %².
Among the 106 assets we track against QUAL, VNQ ranks #59 by 3-year correlation. Over the last 12 months QUAL came out ahead by 9.4 percentage points (+19.7% against +10.3%). Across three years, the rolling one-year figure varied moderately, from 0.36 to 0.82.
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 VNQ: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +19.7% | +10.3% |
| 5-year return | +68.0% | +9.5% |
| Volatility (ann.) | 14.0% | 16.6% |
| Beta vs S&P 500 | 0.93 | 0.59 |
| Max drawdown (3Y) | -18.0% | -17.5% |
| Dividend yield | 0.86% | 3.51% |
| Expense ratio | 0.15% | 0.13% |
| Assets under management | $46.5B | $73.1B |
| Sector / category | ETF · US Style | ETF · Real Estate |
QUAL, iShares's Large Blend fund, carries $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield. VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Portfolio overlap between QUAL and VNQ
The two portfolios are largely distinct. Weighing the shared positions, 1.5% of the two funds is identical, spread across 4 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%). Only by VNQ: VRTPX (14.54%), WELL (8.54%), EQIX (5.25%), AMT (4.22%), SPG (3.89%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 4 common positions shown.
Year-by-year returns
| Year | QUAL | VNQ |
|---|---|---|
| 2022 | -20.5% | -26.3% |
| 2023 | +30.9% | +11.9% |
| 2024 | +22.3% | +4.8% |
| 2025 | +12.7% | +3.2% |
| 2026 | +13.5% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and VNQ good diversifiers for each other?
Only partially. A correlation of 0.55 means QUAL and VNQ 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 VNQ?
As of 2026-08-27, the correlation of weekly returns between QUAL and VNQ is 0.55 over 3 years, 0.43 over 1 year and 0.70 over 5 years.
Is VNQ a good diversifier for QUAL?
Only partially. A correlation of 0.55 means QUAL and VNQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do QUAL and VNQ overlap?
The two funds share 4 holdings amounting to 1.5% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qual-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/qual-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: QUAL correlations · VNQ correlations
