FAAR vs TLTP
First Trust Alternative Absolute Return Strategy ETF vs Amplify TLT US Treasury 12% Option Income ETF
Quick Verdict
TLTP has a lower expense ratio. FAAR delivered stronger 1-year returns. TLTP offers more diversification with 3 holdings.
Side-by-Side Comparison
| Metric | FAAR | TLTP | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.39% | |
| AUM | $191M | $23M | |
| Dividend Yield | 9.19% | 14.33% | |
| Holdings | 6 | 5 | |
| YTD Return | +15.76% | -9.12% | |
| 1Y Return | +20.43% | -7.78% | |
| 3Y Return (annualized) | +9.16% | - | |
| 5Y Return (annualized) | +7.39% | - | |
| Volatility (annualized) | 9.1% | 8.6% | |
| Max Drawdown | -18.8% | -12.7% | |
| Fund Family | First Trust Portfolios (US) | Amplify ETFs | |
| Category | Commodity | Alternative | |
| Inception | May 18, 2016 | Oct 29, 2024 |
FAAR vs TLTP Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Amplify TLT US Treasury 12% Option Income ETF (TLTP) is a ETF from Amplify ETFs. Over the past year FAAR returned +20.43% while TLTP returned -7.78%. Year to date, FAAR is up 15.76% versus a loss of 9.12% for TLTP.
Risk: Volatility and Drawdowns
FAAR has been the more volatile fund, with annualized monthly volatility of 9.1% compared with 8.6% for TLTP. 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 -12.7% for TLTP. 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 -0.05. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.97% per year while TLTP charges 0.39%. On a $10,000 position that is $97 vs $39 annually, a gap of $58 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 14.33% for TLTP.
Holdings Overlap
FAAR and TLTP share 0 holdings out of 4 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 TLTP?
FAAR has an expense ratio of 0.97% while TLTP charges 0.39%. TLTP is the cheaper option. On a $10,000 investment, that is $58 per year of difference.
Which performed better, FAAR or TLTP?
Over the past year FAAR returned +20.43% vs -7.78% for TLTP, so FAAR leads on 1-year performance. Over the longest common window we track (2 years), FAAR annualized +3.48% vs -5.23% for TLTP. Past performance does not guarantee future results.
Which is riskier, FAAR or TLTP?
FAAR has been the more volatile fund at 9.1% annualized versus 8.6% for TLTP. Worst drawdown: FAAR -18.8% vs TLTP -12.7%.
Should I hold both FAAR and TLTP?
FAAR and TLTP have a monthly-return correlation of -0.05, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and TLTP?
FAAR and TLTP share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4 unique securities.
Which pays a higher dividend, FAAR or TLTP?
FAAR yields 9.19% while TLTP yields 14.33%, so TLTP currently pays the higher dividend yield.
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