QUAL vs XLV: Correlation & Overlap
iShares MSCI USA Quality Factor ETF (QUAL) and Health Care Select Sector SPDR Fund (XLV) show a moderate relationship: their 3-year correlation of weekly returns is 0.52. The two funds also share 9.5% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QUAL and XLV?
On 3 years of weekly data the QUAL/XLV correlation comes out at 0.52, moderate. The link has loosened recently: the 1-year correlation (0.31) runs below the 3-year figure (0.52). The 5-year figure is 0.63, and annualized covariance runs at 106.6 %².
Among the 106 assets we track against QUAL, XLV ranks #67 by 3-year correlation. On 12-month performance XLV holds a 7.8-point edge, +19.7% against +27.5%. On a rolling one-year basis the correlation drifted between 0.37 and 0.69, 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 XLV: side by side
| QUAL (iShares MSCI USA Quality Factor ETF) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +19.7% | +27.5% |
| 5-year return | +68.0% | +37.4% |
| Volatility (ann.) | 14.0% | 14.7% |
| Beta vs S&P 500 | 0.93 | 0.42 |
| Max drawdown (3Y) | -18.0% | -17.1% |
| Dividend yield | 0.86% | 1.56% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $46.5B | $41.7B |
| Sector / category | ETF · US Style | Sector ETF |
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. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between QUAL and XLV
The two portfolios are largely distinct, with 12 holdings in common adding up to 9.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in QUAL | Weight in XLV |
|---|---|---|
| LLY | 3.72% | 15.03% |
| JNJ | 2.13% | 10.38% |
| MRK | 1.44% | 6.04% |
| GILD | 0.69% | 2.94% |
| VRTX | 0.47% | 2.22% |
| IDXX | 0.28% | 0.70% |
| EW | 0.15% | 0.83% |
| WAT | 0.14% | 0.65% |
| ZTS | 0.14% | 0.52% |
| DXCM | 0.12% | 0.55% |
| RMD | 0.12% | 0.55% |
| WST | 0.08% | 0.39% |
Largest positions held only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LRCX (3.66%). Only by XLV: ABBV (7.42%), UNH (5.82%), AMGN (3.80%), TMO (3.76%), ABT (3.17%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 12 common positions shown.
Year-by-year returns
| Year | QUAL | XLV |
|---|---|---|
| 2022 | -20.5% | -2.1% |
| 2023 | +30.9% | +2.1% |
| 2024 | +22.3% | +2.5% |
| 2025 | +12.7% | +14.5% |
| 2026 | +13.5% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QUAL and XLV good diversifiers for each other?
Somewhat, no more. With 0.52 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between QUAL and XLV?
Using weekly returns as of 2026-08-27: 0.52 over 3 years, with 0.31 over the last year and 0.63 over 5 years.
Is XLV a good diversifier for QUAL?
Somewhat, no more. With 0.52 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do QUAL and XLV overlap?
The two funds share 12 holdings amounting to 9.5% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qual-vs-xlv.json
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Hubs: QUAL correlations · XLV correlations
