FAAR vs FTKI
FAAR vs FTKI
First Trust Alternative Absolute Return Strategy ETF vs First Trust Small Cap BuyWrite Income ETF
Quick Verdict
FTKI has a lower expense ratio. FTKI delivered stronger 1-year returns. FTKI offers more diversification with 144 holdings.
Side-by-Side Comparison
| Metric | FAAR | FTKI | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.85% | |
| AUM | $191M | $25M | |
| Dividend Yield | 9.19% | 12.53% | |
| Holdings | 6 | 170 | |
| YTD Return | +13.94% | +13.99% | |
| 1Y Return | +19.26% | +23.96% | |
| 3Y Return (annualized) | +8.78% | - | |
| 5Y Return (annualized) | +7.33% | - | |
| Volatility (annualized) | 9.2% | 10.3% | |
| Max Drawdown | -18.8% | -15.2% | |
| Fund Family | First Trust Portfolios (US) | First Trust Portfolios (US) | |
| Category | Commodity | Equity | |
| Inception | May 18, 2016 | Feb 26, 2025 |
FAAR vs FTKI Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and First Trust Small Cap BuyWrite Income ETF (FTKI) is a ETF from First Trust Portfolios (US). Over the past year FAAR returned +19.26% while FTKI returned +23.96%. Year to date, FAAR is up 13.94% versus a gain of 13.99% for FTKI.
Risk: Volatility and Drawdowns
FTKI has been the more volatile fund, with annualized monthly volatility of 10.3% 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 -15.2% for FTKI. 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 0.00. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.97% per year while FTKI charges 0.85%. On a $10,000 position that is $97 vs $85 annually, a gap of $12 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 12.53% for FTKI.
Holdings Overlap
FAAR and FTKI share 0 holdings out of 145 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 FTKI?
FAAR has an expense ratio of 0.97% while FTKI charges 0.85%. FTKI is the cheaper option. On a $10,000 investment, that is $12 per year of difference.
Which performed better, FAAR or FTKI?
Over the past year FAAR returned +19.26% vs +23.96% for FTKI, so FTKI leads on 1-year performance. Over the longest common window we track (1 years), FAAR annualized +3.32% vs +13.38% for FTKI. Past performance does not guarantee future results.
Which is riskier, FAAR or FTKI?
FTKI has been the more volatile fund at 10.3% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs FTKI -15.2%.
Should I hold both FAAR and FTKI?
FAAR and FTKI have a monthly-return correlation of 0.00, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and FTKI?
FAAR and FTKI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 145 unique securities.
Which pays a higher dividend, FAAR or FTKI?
FAAR yields 9.19% while FTKI yields 12.53%, so FTKI currently pays the higher dividend yield.
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