QUAL vs VWO: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI USA Quality Factor ETF (QUAL) and Vanguard FTSE Emerging Markets ETF (VWO) carry a correlation of 0.68, a strong link. Looking through to holdings, 0.1% 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 VWO?
Over the past 3 years, QUAL and VWO moved with a correlation of 0.68, which is strong. Little has changed lately, as the 1-year reading of 0.77 lands near the 3-year figure. Over 5 years the correlation is 0.62, and the annualized covariance of weekly returns is 143.8 %².
By 3-year correlation, VWO places #36 of the 106 assets tracked against QUAL. Neither side won the trailing year by much: +19.7% against +21.6%. Across three years, the rolling one-year figure varied moderately, from 0.50 to 0.81.
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 VWO: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | VWO (Vanguard FTSE Emerging Markets ETF) | |
|---|---|---|
| 1-year return | +19.7% | +21.6% |
| 5-year return | +68.0% | +38.2% |
| Volatility (ann.) | 14.0% | 15.2% |
| Beta vs S&P 500 | 0.93 | 0.75 |
| Max drawdown (3Y) | -18.0% | -17.4% |
| Dividend yield | 0.86% | 2.36% |
| Expense ratio | 0.15% | 0.06% |
| Assets under management | $46.5B | $162.0B |
| Sector / category | ETF · US Style | ETF · International |
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. On the fund side, VWO sits in the Diversified Emerging Mkts category at Vanguard, with $162.0B under management, 4113 holdings, a 0.06% expense ratio, a 2.36% trailing dividend yield.
Portfolio overlap between QUAL and VWO
The two portfolios are largely distinct. Weighing the shared positions, 0.1% of the two funds is identical, spread across 3 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 VWO: 2330 (18.65%), 700 (3.97%), 9988 (2.90%), 2454 (1.62%), 939 (1.07%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 3 common positions shown.
Year-by-year returns
| Year | QUAL | VWO |
|---|---|---|
| 2022 | -20.5% | -18.0% |
| 2023 | +30.9% | +9.3% |
| 2024 | +22.3% | +10.6% |
| 2025 | +12.7% | +25.6% |
| 2026 | +13.5% | +13.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and VWO good diversifiers for each other?
Somewhat, no more. With 0.68 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between QUAL and VWO?
Using weekly returns as of 2026-08-27: 0.68 over 3 years, with 0.77 over the last year and 0.62 over 5 years.
Is VWO a good diversifier for QUAL?
Somewhat, no more. With 0.68 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do QUAL and VWO overlap?
0.1% by weight, across 3 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qual-vs-vwo.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/qual-vs-vwo/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: QUAL correlations · VWO correlations
