FAAR vs FLGV
First Trust Alternative Absolute Return Strategy ETF vs Franklin US Treasury Bond ETF
Quick Verdict
FLGV has a lower expense ratio. FAAR delivered stronger 1-year returns. FLGV offers more diversification with 41 holdings.
Side-by-Side Comparison
| Metric | FAAR | FLGV | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.09% | |
| AUM | $191M | $1.0B | |
| Dividend Yield | 9.19% | 4.11% | |
| Holdings | 6 | 47 | |
| YTD Return | +15.76% | -0.78% | |
| 1Y Return | +20.43% | +1.19% | |
| 3Y Return (annualized) | +9.16% | +3.28% | |
| 5Y Return (annualized) | +7.39% | -0.50% | |
| Volatility (annualized) | 9.1% | 5.0% | |
| Max Drawdown | -18.8% | -18.4% | |
| Fund Family | First Trust Portfolios (US) | Franklin Templeton Investments (US) | |
| Category | Commodity | Fixed Income | |
| Inception | May 18, 2016 | Jun 9, 2020 |
FAAR vs FLGV Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Franklin US Treasury Bond ETF (FLGV) is a ETF from Franklin Templeton Investments (US). Over the past year FAAR returned +20.43% while FLGV returned +1.19%. Year to date, FAAR is up 15.76% versus a loss of 0.78% for FLGV.
Over three years, FAAR compounded at +9.16% per year against +3.28% for FLGV; over five years the annualized figures are +7.39% and -0.50% respectively. Across the full 6-year window we track, FAAR has the edge at +3.48% annualized vs -0.96%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAAR has been the more volatile fund, with annualized monthly volatility of 9.1% compared with 5.0% for FLGV. 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 -18.4% for FLGV. 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 -0.16. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.97% per year while FLGV charges 0.09%. On a $10,000 position that is $97 vs $9 annually, a gap of $88 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 4.11% for FLGV.
Holdings Overlap
FAAR and FLGV share 0 holdings out of 42 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 FLGV?
FAAR has an expense ratio of 0.97% while FLGV charges 0.09%. FLGV is the cheaper option. On a $10,000 investment, that is $88 per year of difference.
Which performed better, FAAR or FLGV?
Over the past year FAAR returned +20.43% vs +1.19% for FLGV, so FAAR leads on 1-year performance. Over the longest common window we track (6 years), FAAR annualized +3.48% vs -0.96% for FLGV. Past performance does not guarantee future results.
Which is riskier, FAAR or FLGV?
FAAR has been the more volatile fund at 9.1% annualized versus 5.0% for FLGV. Worst drawdown: FAAR -18.8% vs FLGV -18.4%.
Should I hold both FAAR and FLGV?
FAAR and FLGV have a monthly-return correlation of -0.16, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and FLGV?
FAAR and FLGV share 0 common holdings with a 0.0% weight overlap. Combined, they hold 42 unique securities.
Which pays a higher dividend, FAAR or FLGV?
FAAR yields 9.19% while FLGV yields 4.11%, so FAAR currently pays the higher dividend yield.
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