FAAR vs VXUS
FAAR vs VXUS
First Trust Alternative Absolute Return Strategy ETF vs Vanguard Total International Stock ETF
Quick Verdict
VXUS has a lower expense ratio. VXUS delivered stronger 1-year returns. VXUS offers more diversification with 7861 holdings.
Side-by-Side Comparison
| Metric | FAAR | VXUS | Winner |
|---|---|---|---|
| Expense Ratio | 0.97% | 0.05% | |
| AUM | $191M | $156.5B | |
| Dividend Yield | 9.19% | 2.60% | |
| Holdings | 6 | 8,747 | |
| YTD Return | +13.94% | +14.57% | |
| 1Y Return | +19.26% | +27.82% | |
| 3Y Return (annualized) | +8.78% | +19.27% | |
| 5Y Return (annualized) | +7.33% | +9.28% | |
| Volatility (annualized) | 9.2% | 15.1% | |
| Max Drawdown | -18.8% | -39.9% | |
| Fund Family | First Trust Portfolios (US) | Vanguard (US) | |
| Category | Commodity | Equity | |
| Inception | May 18, 2016 | Jan 26, 2011 |
FAAR vs VXUS Performance
First Trust Alternative Absolute Return Strategy ETF (FAAR) is a ETF from First Trust Portfolios (US) and Vanguard Total International Stock ETF (VXUS) is a ETF from Vanguard (US). Over the past year FAAR returned +19.26% while VXUS returned +27.82%. Year to date, FAAR is up 13.94% versus a gain of 14.57% for VXUS.
Over three years, FAAR compounded at +8.78% per year against +19.27% for VXUS; over five years the annualized figures are +7.33% and +9.28% respectively. Across the full 10-year window we track, VXUS has the edge at +4.86% annualized vs +3.32%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VXUS has been the more volatile fund, with annualized monthly volatility of 15.1% 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 -39.9% for VXUS. 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 VXUS charges 0.05%. On a $10,000 position that is $97 vs $5 annually, a gap of $92 per year that compounds over a long holding period. On income, FAAR currently yields 9.19% against 2.60% for VXUS.
Holdings Overlap
FAAR and VXUS share 0 holdings out of 7862 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 VXUS?
FAAR has an expense ratio of 0.97% while VXUS charges 0.05%. VXUS is the cheaper option. On a $10,000 investment, that is $92 per year of difference.
Which performed better, FAAR or VXUS?
Over the past year FAAR returned +19.26% vs +27.82% for VXUS, so VXUS leads on 1-year performance. Over the longest common window we track (10 years), FAAR annualized +3.32% vs +4.86% for VXUS. Past performance does not guarantee future results.
Which is riskier, FAAR or VXUS?
VXUS has been the more volatile fund at 15.1% annualized versus 9.2% for FAAR. Worst drawdown: FAAR -18.8% vs VXUS -39.9%.
Should I hold both FAAR and VXUS?
FAAR and VXUS 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 VXUS?
FAAR and VXUS share 0 common holdings with a 0.0% weight overlap. Combined, they hold 7862 unique securities.
Which pays a higher dividend, FAAR or VXUS?
FAAR yields 9.19% while VXUS yields 2.60%, so FAAR currently pays the higher dividend yield.
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