FAAR vs SPGM
First Trust Alternative Absolute Return Strategy ETF vs State Street SPDR Portfolio MSCI Global Stock Market ETF
Quick Verdict
SPGM has a lower expense ratio. SPGM delivered stronger 1-year returns. SPGM offers more diversification with 2846 holdings.
Side-by-Side Comparison
| Metric | FAAR | SPGM | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.09% | |
| AUM | $191M | $1.7B | |
| Dividend Yield | 9.19% | 1.80% | |
| Holdings | 6 | 2,985 | |
| YTD Return | +15.54% | +14.62% | |
| 1Y Return | +20.20% | +26.49% | |
| 3Y Return (annualized) | +9.05% | +21.08% | |
| 5Y Return (annualized) | +7.41% | +11.60% | |
| Volatility (annualized) | 9.1% | 13.6% | |
| Max Drawdown | -18.8% | -34.0% | |
| Fund Family | First Trust Portfolios (US) | SPDR State Street Global Advisors | |
| Category | Commodity | Equity | |
| Inception | May 18, 2016 | Feb 27, 2012 |
FAAR vs SPGM Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM) is a ETF from SPDR State Street Global Advisors. Over the past year FAAR returned +20.20% while SPGM returned +26.49%. Year to date, FAAR is up 15.54% versus a gain of 14.62% for SPGM.
Over three years, FAAR compounded at +9.05% per year against +21.08% for SPGM; over five years the annualized figures are +7.41% and +11.60% respectively. Across the full 10-year window we track, SPGM has the edge at +9.90% annualized vs +3.46%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPGM has been the more volatile fund, with annualized monthly volatility of 13.6% compared with 9.1% 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 -34.0% for SPGM. 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 SPGM charges 0.09%. On a $10,000 position that is $97 vs $9 annually, a gap of $88 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 1.80% for SPGM.
Holdings Overlap
FAAR and SPGM share 0 holdings out of 2847 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 SPGM?
FAAR has an expense ratio of 0.97% while SPGM charges 0.09%. SPGM is the cheaper option. On a $10,000 investment, that is $88 per year of difference.
Which performed better, FAAR or SPGM?
Over the past year FAAR returned +20.20% vs +26.49% for SPGM, so SPGM leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.46% vs +9.90% for SPGM. Past performance does not guarantee future results.
Which is riskier, FAAR or SPGM?
SPGM has been the more volatile fund at 13.6% annualized versus 9.1% for FAAR. Worst drawdown: FAAR -18.8% vs SPGM -34.0%.
Should I hold both FAAR and SPGM?
FAAR and SPGM 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 SPGM?
FAAR and SPGM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 2847 unique securities.
Which pays a higher dividend, FAAR or SPGM?
FAAR yields 9.19% while SPGM yields 1.80%, so FAAR currently pays the higher dividend yield.
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