QUAL vs VYM: Correlation & Overlap
How closely do iShares MSCI USA Quality Factor ETF (QUAL) and Vanguard High Dividend Yield ETF (VYM) trade together? Their weekly returns over three years give a correlation of 0.80, which is very strong. Looking through to holdings, 17.2% 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 VYM?
On 3 years of weekly data the QUAL/VYM correlation comes out at 0.80, very strong, meaning they move nearly in lockstep. The relationship has been stable: the 1-year correlation (0.73) sits close to the 3-year figure. The 5-year figure is 0.82, and annualized covariance runs at 136.9 %².
By 3-year correlation, VYM places #26 of the 106 assets tracked against QUAL. Twelve-month performance is nearly a tie, at +19.7% for QUAL and +21.1% for VYM. Across three years, the rolling one-year figure varied moderately, from 0.56 to 0.94.
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 VYM: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +19.7% | +21.1% |
| 5-year return | +68.0% | +76.6% |
| Volatility (ann.) | 14.0% | 12.3% |
| Beta vs S&P 500 | 0.93 | 0.69 |
| Max drawdown (3Y) | -18.0% | -14.5% |
| Dividend yield | 0.86% | 2.24% |
| Expense ratio | 0.15% | 0.04% |
| Assets under management | $46.5B | $99.2B |
| Sector / category | ETF · US Style | ETF · Dividend |
QUAL, iShares's Large Blend fund, carries $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield. VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Portfolio overlap between QUAL and VYM
The two portfolios partially overlap: 17.2% of the funds' weight sits in the same underlying holdings (49 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in QUAL | Weight in VYM |
|---|---|---|
| XOM | 2.18% | 2.63% |
| JNJ | 2.13% | 2.51% |
| MRK | 1.44% | 1.31% |
| LIN | 1.02% | 0.90% |
| KO | 0.82% | 1.39% |
| PG | 0.81% | 1.37% |
| GILD | 0.69% | 0.66% |
| BLK | 0.50% | 0.68% |
| LMT | 0.91% | 0.48% |
| ADP | 1.22% | 0.43% |
| ACN | 0.73% | 0.41% |
| PGR | 0.41% | 0.50% |
| MMM | 0.93% | 0.37% |
| PEP | 0.36% | 0.78% |
| ITW | 0.76% | 0.34% |
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%). Only by VYM: AVGO (7.37%), JPM (3.83%), CSCO (1.87%), ABBV (1.81%), BAC (1.67%).
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 | VYM |
|---|---|---|
| 2022 | -20.5% | -0.4% |
| 2023 | +30.9% | +6.6% |
| 2024 | +22.3% | +17.6% |
| 2025 | +12.7% | +15.4% |
| 2026 | +13.5% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and VYM good diversifiers for each other?
Not really. At 0.80, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between QUAL and VYM?
As of 2026-08-27, the correlation of weekly returns between QUAL and VYM is 0.80 over 3 years, 0.73 over 1 year and 0.82 over 5 years.
Is VYM a good diversifier for QUAL?
Not really. At 0.80, the two trade almost as one position, and owning both buys little extra protection.
How much do QUAL and VYM overlap?
The two funds share 49 holdings amounting to 17.2% of weight, per issuer portfolio files dated 2026-08-26.
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Hubs: QUAL correlations · VYM correlations
