FAAR vs VOO
FAAR vs VOO
First Trust Alternative Absolute Return Strategy ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FAAR | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.03% | |
| AUM | $191M | $979.0B | |
| Dividend Yield | 9.19% | 1.09% | |
| Holdings | 6 | 509 | |
| YTD Return | +13.94% | +13.80% | |
| 1Y Return | +19.26% | +23.71% | |
| 3Y Return (annualized) | +8.78% | +21.50% | |
| 5Y Return (annualized) | +7.33% | +13.44% | |
| Volatility (annualized) | 9.2% | 14.1% | |
| Max Drawdown | -18.8% | -34.3% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Commodity | Equity | |
| Inception | May 18, 2016 | Sep 7, 2010 |
FAAR vs VOO Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year FAAR returned +19.26% while VOO returned +23.71%. Year to date, FAAR is up 13.94% versus a gain of 13.80% for VOO.
Over three years, FAAR compounded at +8.78% per year against +21.50% for VOO; over five years the annualized figures are +7.33% and +13.44% respectively. Across the full 10-year window we track, VOO has the edge at +13.58% annualized vs +3.32%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.1% 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 -34.3% for VOO. 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 0.11. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAAR charges 0.97% per year while VOO charges 0.03%. On a $10,000 position that is $97 vs $3 annually, a gap of $94 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 1.09% for VOO.
Holdings Overlap
FAAR and VOO share 0 holdings out of 506 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 VOO?
FAAR has an expense ratio of 0.97% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $94 per year of difference.
Which performed better, FAAR or VOO?
Over the past year FAAR returned +19.26% vs +23.71% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.32% vs +13.58% for VOO. Past performance does not guarantee future results.
Which is riskier, FAAR or VOO?
VOO has been the more volatile fund at 14.1% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs VOO -34.3%.
Should I hold both FAAR and VOO?
FAAR and VOO have a monthly-return correlation of 0.11, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAAR and VOO?
FAAR and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 506 unique securities.
Which pays a higher dividend, FAAR or VOO?
FAAR yields 9.19% while VOO yields 1.09%, so FAAR currently pays the higher dividend yield.
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