FAAR vs FNGG
First Trust Alternative Absolute Return Strategy ETF vs Direxion Daily NYSE FANG+ Bull 2X ETF
Quick Verdict
FNGG has a lower expense ratio. FNGG delivered stronger 1-year returns. FNGG offers more diversification with 18 holdings.
Side-by-Side Comparison
| Metric | FAAR | FNGG | Winner |
|---|---|---|---|
| Expense Ratio | 0.98% | 0.97% | |
| AUM | $203M | $143M | |
| Dividend Yield | 9.89% | 10.70% | |
| Holdings | 5 | 18 | |
| YTD Return | +16.54% | +29.44% | |
| 1Y Return | +18.84% | +35.54% | |
| 3Y Return (annualized) | +9.37% | +60.38% | |
| 5Y Return (annualized) | +7.87% | +3.76% | |
| Volatility (annualized) | 9.2% | 58.4% | |
| Max Drawdown | -18.8% | -91.3% | |
| Fund Family | First Trust Portfolios (US) | Direxion Shares ETF Trust | |
| Category | Commodity | Alternative | |
| Inception | May 18, 2016 | Sep 29, 2021 |
FAAR vs FNGG Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Direxion Daily NYSE FANG+ Bull 2X ETF (FNGG) is a ETF from Direxion Shares ETF Trust. Over the past year FAAR returned +18.84% while FNGG returned +35.54%. Year to date, FAAR is up 16.54% versus a gain of 29.44% for FNGG.
Over three years, FAAR compounded at +9.37% per year against +60.38% for FNGG; over five years the annualized figures are +7.87% and +3.76% respectively. Across the full 5-year window we track, FNGG has the edge at +3.76% annualized vs +3.54%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FNGG has been the more volatile fund, with annualized monthly volatility of 58.4% compared with 9.2% for FAAR. 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 -91.3% for FNGG. 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 -0.09. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.98% per year while FNGG charges 0.97%. On a $10,000 position that is $98 vs $97 annually, a gap of $1 per year that compounds over a long holding period. On income, FAAR currently yields 9.89% against 10.70% for FNGG.
Holdings Overlap
FAAR and FNGG share 0 holdings out of 14 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 FNGG?
FAAR has an expense ratio of 0.98% while FNGG charges 0.97%. FNGG is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, FAAR or FNGG?
Over the past year FAAR returned +18.84% vs +35.54% for FNGG, so FNGG leads on 1-year performance. Over the longest common window we track (5 years), FAAR annualized +3.54% vs +3.76% for FNGG. Past performance does not guarantee future results.
Which is riskier, FAAR or FNGG?
FNGG has been the more volatile fund at 58.4% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs FNGG -91.3%.
Should I hold both FAAR and FNGG?
FAAR and FNGG have a monthly-return correlation of -0.09, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and FNGG?
FAAR and FNGG share 0 common holdings with a 0.0% weight overlap. Combined, they hold 14 unique securities.
Which pays a higher dividend, FAAR or FNGG?
FAAR yields 9.89% while FNGG yields 10.70%, so FNGG currently pays the higher dividend yield.
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