FAAR vs SOXL
First Trust Alternative Absolute Return Strategy ETF vs Direxion Daily Semiconductor Bull 3X ETF
Quick Verdict
SOXL has a lower expense ratio. SOXL delivered stronger 1-year returns. SOXL offers more diversification with 32 holdings.
Side-by-Side Comparison
| Metric | FAAR | SOXL | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.75% | |
| AUM | $191M | $18.8B | |
| Dividend Yield | 9.19% | 0.00% | |
| Holdings | 6 | 43 | |
| YTD Return | +15.10% | +207.71% | |
| 1Y Return | +19.74% | +396.62% | |
| 3Y Return (annualized) | +8.93% | +85.73% | |
| 5Y Return (annualized) | +7.23% | +27.84% | |
| Volatility (annualized) | 9.2% | 87.9% | |
| Max Drawdown | -18.8% | -90.5% | |
| Fund Family | First Trust Portfolios (US) | Direxion Shares ETF Trust | |
| Category | Commodity | Alternative | |
| Inception | May 18, 2016 | Mar 11, 2010 |
FAAR vs SOXL Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Direxion Daily Semiconductor Bull 3X ETF (SOXL) is a ETF from Direxion Shares ETF Trust. Over the past year FAAR returned +19.74% while SOXL returned +396.62%. Year to date, FAAR is up 15.10% versus a gain of 207.71% for SOXL.
Over three years, FAAR compounded at +8.93% per year against +85.73% for SOXL; over five years the annualized figures are +7.23% and +27.84% respectively. Across the full 10-year window we track, SOXL has the edge at +39.06% annualized vs +3.42%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SOXL has been the more volatile fund, with annualized monthly volatility of 87.9% 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 -90.5% for SOXL. 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 0.97% per year while SOXL charges 0.75%. On a $10,000 position that is $97 vs $75 annually, a gap of $22 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 0.00% for SOXL.
Holdings Overlap
FAAR and SOXL share 0 holdings out of 33 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 SOXL?
FAAR has an expense ratio of 0.97% while SOXL charges 0.75%. SOXL is the cheaper option. On a $10,000 investment, that is $22 per year of difference.
Which performed better, FAAR or SOXL?
Over the past year FAAR returned +19.74% vs +396.62% for SOXL, so SOXL leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.42% vs +39.06% for SOXL. Past performance does not guarantee future results.
Which is riskier, FAAR or SOXL?
SOXL has been the more volatile fund at 87.9% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs SOXL -90.5%.
Should I hold both FAAR and SOXL?
FAAR and SOXL 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 SOXL?
FAAR and SOXL share 0 common holdings with a 0.0% weight overlap. Combined, they hold 33 unique securities.
Which pays a higher dividend, FAAR or SOXL?
FAAR yields 9.19% while SOXL yields 0.00%, so FAAR currently pays the higher dividend yield.
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