QUAL vs XLRE: Correlation & Overlap
iShares MSCI USA Quality Factor ETF (QUAL) and Real Estate Select Sector SPDR Fund (XLRE) show a moderate relationship: their 3-year correlation of weekly returns is 0.53. The two funds also share 1.8% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QUAL and XLRE?
Across a 3-year window, the weekly returns of QUAL and XLRE correlate at 0.53, moderate. The past 12 months show a weaker link (0.39) than the 3-year average (0.53). Stretching to 5 years gives 0.69, with an annualized covariance of 123.6 %².
By 3-year correlation, XLRE places #64 of the 106 assets tracked against QUAL. Over the last 12 months QUAL came out ahead by 10.2 percentage points (+19.7% against +9.5%). On a rolling one-year basis the correlation drifted between 0.36 and 0.82, a moderate band.
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 XLRE: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +19.7% | +9.5% |
| 5-year return | +68.0% | +11.4% |
| Volatility (ann.) | 14.0% | 16.7% |
| Beta vs S&P 500 | 0.93 | 0.57 |
| Max drawdown (3Y) | -18.0% | -16.6% |
| Dividend yield | 0.86% | 3.12% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $46.5B | $8.6B |
| Sector / category | ETF · US Style | Sector ETF |
QUAL, iShares's Large Blend fund, carries $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield. On the fund side, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between QUAL and XLRE
The two portfolios are largely distinct. Weighing the shared positions, 1.8% of the two funds is identical, spread across 5 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in QUAL | Weight in XLRE |
|---|---|---|
| PLD | 0.81% | 9.06% |
| PSA | 0.31% | 4.63% |
| VMRK | 0.29% | 4.96% |
| CBRE | 0.27% | 4.45% |
| CSGP | 0.08% | 1.33% |
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%). Only by XLRE: WELL (11.43%), EQIX (7.14%), AMT (5.49%), DLR (5.01%), SPG (4.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 5 common positions shown.
Year-by-year returns
| Year | QUAL | XLRE |
|---|---|---|
| 2022 | -20.5% | -26.2% |
| 2023 | +30.9% | +12.4% |
| 2024 | +22.3% | +5.1% |
| 2025 | +12.7% | +2.6% |
| 2026 | +13.5% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and XLRE good diversifiers for each other?
Somewhat, no more. With 0.53 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between QUAL and XLRE?
Using weekly returns as of 2026-08-27: 0.53 over 3 years, with 0.39 over the last year and 0.69 over 5 years.
Is XLRE a good diversifier for QUAL?
Somewhat, no more. With 0.53 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do QUAL and XLRE overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.8% by weight over 5 common positions.
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Related comparisons
Hubs: QUAL correlations · XLRE correlations
