FAAR vs FTCB
First Trust Alternative Absolute Return Strategy ETF vs First Trust Core Investment Grade ETF
Quick Verdict
FTCB has a lower expense ratio. FAAR delivered stronger 1-year returns. FTCB offers more diversification with 798 holdings.
Side-by-Side Comparison
| Metric | FAAR | FTCB | Winner |
|---|---|---|---|
| Expense Ratio | 0.98% | 0.56% | |
| AUM | $203M | $2.6B | |
| Dividend Yield | 9.89% | 5.40% | |
| Holdings | 5 | 798 | |
| YTD Return | +15.31% | -0.12% | |
| 1Y Return | +19.19% | +2.57% | |
| 3Y Return (annualized) | +8.74% | - | |
| 5Y Return (annualized) | +7.43% | - | |
| Volatility (annualized) | 9.2% | 5.1% | |
| Max Drawdown | -18.8% | -5.0% | |
| Fund Family | First Trust Portfolios (US) | First Trust Portfolios (US) | |
| Category | Commodity | Fixed Income | |
| Inception | May 18, 2016 | Nov 7, 2023 |
FAAR vs FTCB Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and First Trust Core Investment Grade ETF (FTCB) is a ETF from First Trust Portfolios (US). Over the past year FAAR returned +19.19% while FTCB returned +2.57%. Year to date, FAAR is up 15.31% versus a loss of 0.12% for FTCB.
Risk: Volatility and Drawdowns
FAAR has been the more volatile fund, with annualized monthly volatility of 9.2% compared with 5.1% for FTCB. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -18.8% for FAAR and -5.0% for FTCB. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at -0.17. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.98% per year while FTCB charges 0.56%. On a $10,000 position that is $98 vs $56 annually, a gap of $42 per year that compounds over a long holding period. On income, FAAR currently yields 9.89% against 5.40% for FTCB.
Holdings Overlap
FAAR and FTCB share 0 holdings out of 303 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FAAR or FTCB?
FAAR has an expense ratio of 0.98% while FTCB charges 0.56%. FTCB is the cheaper option. On a $10,000 investment, that is $42 per year of difference.
Which performed better, FAAR or FTCB?
Over the past year FAAR returned +19.19% vs +2.57% for FTCB, so FAAR leads on 1-year performance. Over the longest common window we track (3 years), FAAR annualized +3.43% vs +5.62% for FTCB. Past performance does not guarantee future results.
Which is riskier, FAAR or FTCB?
FAAR has been the more volatile fund at 9.2% annualized versus 5.1% for FTCB. Worst drawdown: FAAR -18.8% vs FTCB -5.0%.
Should I hold both FAAR and FTCB?
FAAR and FTCB have a monthly-return correlation of -0.17, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and FTCB?
FAAR and FTCB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 303 unique securities.
Which pays a higher dividend, FAAR or FTCB?
FAAR yields 9.89% while FTCB yields 5.40%, so FAAR currently pays the higher dividend yield.
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