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QUAL vs. XLF
Performance
Return for Risk
Drawdowns
Volatility
Dividends

QUAL vs. XLF

Last updated Jul 22, 2026
Documentation

QUAL (iShares MSCI USA Quality Factor ETF) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - QUAL is a Large Cap Blend Equities fund tracking the MSCI USA Sector Neutral Quality Index, while XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, QUAL returned 13.99%/yr vs 13.38%/yr for XLF. A 0.72 correlation means they provide meaningful diversification when combined. QUAL charges 0.15%/yr vs 0.08%/yr for XLF.

Performance

QUAL vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares MSCI USA Quality Factor ETF (QUAL) and State Street Financial Select Sector SPDR ETF (XLF). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, QUAL achieves a 10.25% return, which is significantly higher than XLF's 3.34% return. Both investments have delivered pretty close results over the past 10 years, with QUAL having a 13.99% annualized return and XLF not far behind at 13.38%.

QUAL

1D
0.55%
1M
1.04%
6M
9.75%
YTD
10.25%
1Y
19.40%
3Y*
17.75%
5Y*
11.28%
10Y*
13.99%
ALL TIME*
13.65%

XLF

1D
0.12%
1M
5.11%
6M
6.38%
YTD
3.34%
1Y
8.76%
3Y*
18.61%
5Y*
11.07%
10Y*
13.38%
ALL TIME*
6.04%
*Multi-year figures are annualized to reflect compound growth (CAGR)

QUAL vs. XLF - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
QUAL
iShares MSCI USA Quality Factor ETF		10.25%12.65%22.29%30.88%-20.50%26.94%17.04%33.89%-5.70%22.26%
XLF
State Street Financial Select Sector SPDR ETF		3.34%14.90%30.56%12.03%-10.59%34.80%-1.74%31.88%-13.06%22.00%

Correlation

The correlation between QUAL and XLF is 0.60, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.60

Correlation (3Y)
Calculated over the trailing 3-year period

0.63

Correlation (5Y)
Calculated over the trailing 5-year period

0.70

Correlation (10Y)
Calculated over the trailing 10-year period

0.70

Correlation (All Time)
Calculated using the full available price history since Jul 18, 2013

0.72

The correlation between QUAL and XLF shifts across timeframes, from 0.60 (1 year) to 0.72 (all time), reflecting how their relationship changes across market environments.

QUAL vs. XLF - Sectors Allocation Comparison

Sectors
QUAL
XLF

Technology

40.2%
1.6%

Financial Services

10.9%
98.2%

Communication Services

10.3%

-

Healthcare

9.2%

-

Consumer Cyclical

9.0%

-

Industrials

7.4%
0.2%

Consumer Defensive

4.3%

-

Energy

2.9%

-

Utilities

2.1%

-

Basic Materials

1.9%

-

Real Estate

1.7%

-

Technology

QUAL
40.2%
XLF
1.6%

Financial Services

QUAL
10.9%
XLF
98.2%

Communication Services

QUAL
10.3%
XLF

-

Healthcare

QUAL
9.2%
XLF

-

Consumer Cyclical

QUAL
9.0%
XLF

-

Industrials

QUAL
7.4%
XLF
0.2%

Consumer Defensive

QUAL
4.3%
XLF

-

Energy

QUAL
2.9%
XLF

-

Utilities

QUAL
2.1%
XLF

-

Basic Materials

QUAL
1.9%
XLF

-

Real Estate

QUAL
1.7%
XLF

-

Compare stocks, funds, or ETFs

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iShares MSCI USA Quality Factor ETF

State Street Financial Select Sector SPDR ETF

Often compared with QUAL:
QUAL vs. SPHQQUAL vs. SPYQUAL vs. MTUMQUAL vs. USMVQUAL vs. VOOQUAL vs. IVVQUAL vs. SCHD
Often compared with XLF:
XLF vs. SPYXLF vs. VFHXLF vs. KBWBXLF vs. XLVXLF vs. KREXLF vs. KBEXLF vs. JPM

Return for Risk

QUAL vs. XLF — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
QUAL
QUAL Risk / Return Rank: 6565
Overall Rank
QUAL Sharpe Ratio Rank: 6666
Sharpe Ratio Rank
QUAL Sortino Ratio Rank: 6666
Sortino Ratio Rank
QUAL Omega Ratio Rank: 6363
Omega Ratio Rank
QUAL Calmar Ratio Rank: 5858
Calmar Ratio Rank
QUAL Martin Ratio Rank: 7373
Martin Ratio Rank
XLF
XLF Risk / Return Rank: 2121
Overall Rank
XLF Sharpe Ratio Rank: 2424
Sharpe Ratio Rank
XLF Sortino Ratio Rank: 2222
Sortino Ratio Rank
XLF Omega Ratio Rank: 2222
Omega Ratio Rank
XLF Calmar Ratio Rank: 2020
Calmar Ratio Rank
XLF Martin Ratio Rank: 2020
Martin Ratio Rank
The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

QUAL vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares MSCI USA Quality Factor ETF (QUAL) and State Street Financial Select Sector SPDR ETF (XLF). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

QUALXLFDifference
Sharpe ratioReturn per unit of total volatility
1.60
0.60

+1.00

Sortino ratioReturn per unit of downside risk
2.29
0.91

+1.38

Omega ratioGain probability vs. loss probability

1.28

1.11

+0.17

Calmar ratioReturn relative to maximum drawdown

2.16

0.59

+1.56

Martin ratioReturn relative to average drawdown

9.67

1.51

+8.16

QUAL vs. XLF - Sharpe Ratio Comparison

The current QUAL Sharpe Ratio is 1.60, which is higher than the XLF Sharpe Ratio of 0.60. The chart below compares the historical Sharpe Ratios of QUAL and XLF, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Drawdowns

QUAL vs. XLF - Drawdown Comparison

The maximum QUAL drawdown since its inception was -34.06%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for QUAL and XLF.

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Drawdown Indicators

QUALXLFDifference

Max Drawdown

Largest peak-to-trough decline

-34.06%

-82.69%

+48.63%

Max Drawdown (1Y)

Largest decline over 1 year

-9.03%

-14.79%

+5.76%

Max Drawdown (3Y)

Largest decline over 3 years

-18.00%

-15.54%

-2.46%

Max Drawdown (5Y)

Largest decline over 5 years

-28.23%

-25.81%

-2.42%

Max Drawdown (10Y)

Largest decline over 10 years

-34.06%

-42.86%

+8.80%

Current Drawdown

Current decline from peak

-1.15%

-1.13%

-0.02%

Average Drawdown

Average peak-to-trough decline

-4.07%

-19.94%

+15.87%

Ulcer Index

Depth and duration of drawdowns from previous peaks

2.01%

5.81%

-3.80%

Volatility

QUAL vs. XLF - Volatility Comparison

The current volatility for iShares MSCI USA Quality Factor ETF (QUAL) is 3.13%, while State Street Financial Select Sector SPDR ETF (XLF) has a volatility of 3.91%. This indicates that QUAL experiences smaller price fluctuations and is considered to be less risky than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

QUALXLFDifference

Volatility (1M)

Calculated over the trailing 1-month period

3.13%

3.91%

-0.78%

Volatility (6M)

Calculated over the trailing 6-month period

9.79%

11.28%

-1.49%

Volatility (1Y)

Calculated over the trailing 1-year period

12.20%

14.63%

-2.43%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

17.38%

18.44%

-1.06%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

18.08%

22.07%

-3.99%

QUAL vs. XLF - Expense Ratio Comparison

QUAL has a 0.15% expense ratio, which is higher than XLF's 0.08% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

QUAL vs. XLF - Dividend Comparison

QUAL's dividend yield for the trailing twelve months is around 0.86%, less than XLF's 1.44% yield.

PositionTTM20252024202320222021202020192018201720162015
QUAL
iShares MSCI USA Quality Factor ETF		0.86%0.94%1.02%1.23%1.59%1.20%1.39%1.60%2.00%1.76%1.96%1.63%
XLF
State Street Financial Select Sector SPDR ETF		1.44%1.31%1.42%1.71%2.04%1.63%2.03%1.87%2.08%1.48%21.10%1.95%

Frequently Asked Questions

QUAL and XLF have a correlation of 0.60, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

XLF has higher volatility (3.91%) compared to QUAL (3.13%). In terms of maximum drawdown, QUAL dropped -34.06% vs XLF's -82.69%.

On 10-year performance, QUAL leads with 13.99% vs 13.38% for XLF. On fees, XLF is cheaper at 0.08% per year. On volatility, QUAL has been the lower-risk option at 3.13%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, QUAL has performed better with a 13.99% return vs 13.38%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

XLF is cheaper with a 0.08% expense ratio, compared with 0.15% for QUAL.

XLF has the higher dividend yield at 1.44%, compared with 0.86% for QUAL.

QUAL is categorized as Large Cap Blend Equities, while XLF is Financials Equities. QUAL tracks MSCI USA Sector Neutral Quality Index, while XLF tracks Financial Select Sector Index. They also come from different issuers: iShares and State Street. Their fees differ too: 0.15% for QUAL and 0.08% for XLF.

QUAL currently has the higher Sharpe Ratio (1.60 vs 0.60), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.

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