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First Trust Alternative Absolute Return Strategy ETF (FAAR) Sharpe Ratio: 3.09

ETF · Currency in USD · Last updated Jun 3, 2026

FAAR is an actively managed ETF by First Trust. FAAR launched on May 18, 2016 and has a 0.95% expense ratio.

FAAR's Sharpe Ratio of 3.09 indicates that for each unit of volatility, it generates 3.09 units of excess return above the risk-free rate. The ratio is calculated using historical daily returns over the past 12 months (as of Jun 3, 2026).

Sharpe uses total volatility (standard deviation) which includes both upside and downside price movements, making it useful for comparing risk-adjusted returns across different assets.

FAAR Sharpe Ratio Rank

FAAR Sharpe Ratio Rank: 89.489
Exceptional

FAAR ranks above 89.4% of all investments in our database based on Sharpe Ratio over the past 12 months, demonstrating exceptional risk-adjusted returns. Securities are ranked from 0 (worst) to 100 (best).

What moves the rank

  • Strong returns with low total volatility → Higher rank
  • High volatility (both upside and downside) → Lower rank
  • Consistent returns → Higher rank than volatile returns of same magnitude
  • Sharp drawdowns increase volatility → Lower rank

What you can do with this information

  • Suitable as a core holding given strong risk-adjusted returns
  • Monitor rank changes to detect deteriorating return-to-volatility profile
  • Exceptional Sharpe ratio supports larger position sizes
  • Compare with category peers to assess whether strength is investment-specific or category-wide

FAAR Sharpe Ratio Market Positioning

The chart shows FAAR's Sharpe Ratio relative to all ETFs on our platform, with color zones indicating percentile rankings. Higher ratios indicate better risk-adjusted returns.

  • Red zone (bottom 25%): 0.90 or lower
  • Yellow zone (middle 50%): 0.90 to 2.51
  • Green zone (top 25%): 2.51 or higher
  • Top 1%: 7.87+
  • Median: 1.75 — half of all investments score higher

How it compares to other similar ETFs

The table compares First Trust Alternative Absolute Return Strategy ETF's Sharpe Ratio with other ETFs in the Commodities category across multiple time periods, showing how FAAR's risk-adjusted performance compares to similar funds.

Data shows 1-, 5-, and 10-year periods, plus each fund's all-time average, as of Jun 3, 2026.

SymbolName1Y Sharpe Ratio5Y Sharpe Ratio10Y Sharpe RatioAll Time Sharpe Ratio
BWETBreakwave Tanker Shipping ETF16.94
BDRYBreakwave Dry Bulk Shipping ETF3.67
FAARFirst Trust Alternative Absolute Return Strategy ETF3.09
ZSBUSCF Sustainable Battery Metals Strategy Fund2.99
PITVanEck Commodity Strategy ETF2.96
EVMTInvesco Electric Vehicle Metals Commodity Strategy No K-1 ETF2.95
CMDTPIMCO Commodity Strategy Active Exchange-Traded Fund2.93
ZSCUSCF Sustainable Commodity Strategy Fund2.91
CERYSPDR Bloomberg Enhanced Roll Yield Commodity Strategy No K-1 ETF2.91
FTGCFirst Trust Global Tactical Commodity Strategy Fund2.72

S&P 500 Index

How to choose period

Historical Sharpe Ratio

The chart shows FAAR's rolling Sharpe ratio over time compared to your chosen benchmark. Rising trends indicate improving returns relative to total volatility, while declining trends may signal deteriorating risk-adjusted performance or increased volatility. Use multiple timeframes to distinguish short-term fluctuations from long-term patterns.

Identify market cycles by observing when FAAR consistently outperforms (line above benchmark), underperforms (below benchmark), or aligns with the benchmark.

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Sharpe Ratio Calculator

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