FAAR vs SCHD
First Trust Alternative Absolute Return Strategy ETF vs Schwab US Dividend Equity ETF
Which is better, FAAR or SCHD?
Commodities against Large Cap Value.
SCHD has a lower expense ratio. SCHD led over 1Y, 3Y, 5Y and the full window.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | FAAR | SCHD |
|---|---|---|
| Expense Ratio | 0.98% | 0.06%Best |
| AUM | $212M | $112.1B |
| Dividend Yield | 9.96% | 3.00% |
| Holdings | 3 | 103 |
| YTD Return | +20.87% | +23.46%Best |
| 1Y Return | +20.26% | +27.20%Best |
| 3Y Return (annualized) | +9.32% | +15.41%Best |
| 5Y Return (annualized) | +8.64% | +10.16%Best |
| Volatility (annualized) | 9.3%Best | 15.1% |
| Max Drawdown | -18.8%Best | -33.4% |
| $10,000 over 5 years | $15,134 | $16,223Best |
| Fund Family | First Trust Portfolios (US) | Charles Schwab Asset Management |
| Category | Commodity | Equity |
| Style | Commodities | Large Cap Value |
| Inception | May 18, 2016 | Oct 20, 2011 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: May 23, 2016 to Sep 18, 2026 (10.3 years).
FAAR vs SCHD growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 10.3 years both funds cover.
FAAR vs SCHD Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is an ETF from First Trust Portfolios (US) and Schwab US Dividend Equity ETF (SCHD) is an ETF from Charles Schwab Asset Management. Over the past year FAAR returned +20.26% while SCHD returned +27.20%. Year to date, FAAR is up 20.87% versus a gain of 23.46% for SCHD.
Over three years, FAAR compounded at +9.32% per year against +15.41% for SCHD; over five years the annualized figures are +8.64% and +10.16% respectively. Across the full 10-year window we track, SCHD has the edge at +11.51% annualized vs +3.88%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SCHD has been the more volatile fund, with annualized monthly volatility of 15.1% compared with 9.3% 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 -33.4% for SCHD. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.23. They move largely independently of each other.
Fees and Cost Over Time
FAAR charges 0.98% per year while SCHD charges 0.06%. On a $10,000 position that is $98 vs $6 annually, a gap of $92 per year that compounds over a long holding period. On income, FAAR currently yields 9.96% against 3.00% for SCHD.
You are not choosing between two funds in isolation.
Whichever of FAAR and SCHD you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, FAAR or SCHD?
FAAR has an expense ratio of 0.98% while SCHD charges 0.06%. SCHD is the cheaper option, by $92 a year on a $10,000 investment.
Which performed better, FAAR or SCHD?
Over the past year FAAR returned +20.26% vs +27.20% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.88% vs +11.51% for SCHD. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, FAAR or SCHD?
SCHD has been the more volatile fund at 15.1% annualized versus 9.3% for FAAR. Worst drawdown: FAAR -18.8% vs SCHD -33.4%.
Should I hold both FAAR and SCHD?
FAAR and SCHD have a monthly-return correlation of 0.23, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, FAAR or SCHD?
FAAR yields 9.96% while SCHD yields 3.00%, so FAAR currently pays the higher dividend yield.
Is SCHD better than FAAR?
SCHD has a lower expense ratio. SCHD led over 1Y, 3Y, 5Y and the full window. Which one suits a particular account depends on what it is for. This is information, not a recommendation.