FAAR vs HFXI
FAAR vs HFXI
First Trust Alternative Absolute Return Strategy ETF vs NYLI FTSE International Equity Currency Neutral ETF
Quick Verdict
HFXI has a lower expense ratio. HFXI delivered stronger 1-year returns. HFXI offers more diversification with 759 holdings.
Side-by-Side Comparison
| Metric | FAAR | HFXI | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.20% | |
| AUM | $191M | $2.0B | |
| Dividend Yield | 9.19% | 3.96% | |
| Holdings | 6 | 858 | |
| YTD Return | +13.94% | +17.17% | |
| 1Y Return | +19.26% | +32.47% | |
| 3Y Return (annualized) | +8.78% | +20.61% | |
| 5Y Return (annualized) | +7.33% | +12.38% | |
| Volatility (annualized) | 9.2% | 13.8% | |
| Max Drawdown | -18.8% | -34.2% | |
| Fund Family | First Trust Portfolios (US) | INDEXIQ ETF TRUST | |
| Category | Commodity | Equity | |
| Inception | May 18, 2016 | Jul 22, 2015 |
FAAR vs HFXI Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and NYLI FTSE International Equity Currency Neutral ETF (HFXI) is a ETF from INDEXIQ ETF TRUST. Over the past year FAAR returned +19.26% while HFXI returned +32.47%. Year to date, FAAR is up 13.94% versus a gain of 17.17% for HFXI.
Over three years, FAAR compounded at +8.78% per year against +20.61% for HFXI; over five years the annualized figures are +7.33% and +12.38% respectively. Across the full 10-year window we track, HFXI has the edge at +7.94% annualized vs +3.32%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HFXI has been the more volatile fund, with annualized monthly volatility of 13.8% 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 -34.2% for HFXI. 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 0.12. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.97% per year while HFXI charges 0.20%. On a $10,000 position that is $97 vs $20 annually, a gap of $77 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 3.96% for HFXI.
Holdings Overlap
FAAR and HFXI share 0 holdings out of 760 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 HFXI?
FAAR has an expense ratio of 0.97% while HFXI charges 0.20%. HFXI is the cheaper option. On a $10,000 investment, that is $77 per year of difference.
Which performed better, FAAR or HFXI?
Over the past year FAAR returned +19.26% vs +32.47% for HFXI, so HFXI leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.32% vs +7.94% for HFXI. Past performance does not guarantee future results.
Which is riskier, FAAR or HFXI?
HFXI has been the more volatile fund at 13.8% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs HFXI -34.2%.
Should I hold both FAAR and HFXI?
FAAR and HFXI have a monthly-return correlation of 0.12, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and HFXI?
FAAR and HFXI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 760 unique securities.
Which pays a higher dividend, FAAR or HFXI?
FAAR yields 9.19% while HFXI yields 3.96%, so FAAR currently pays the higher dividend yield.
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