BNDW vs. FAAR
BNDW (Vanguard Total World Bond ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - BNDW is a Global Bonds fund tracking the Bloomberg Global Aggregate Float Adjusted Composite Index, while FAAR is a Commodities fund actively managed by First Trust. BNDW is passively managed, while FAAR is actively managed. Over the past 5 years, BNDW returned 0.25%/yr vs 7.89%/yr for FAAR. At a correlation of -0.10, they often move in opposite directions. BNDW charges 0.05%/yr vs 0.95%/yr for FAAR.
Performance
BNDW vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, BNDW achieves a 0.73% return, which is significantly lower than FAAR's 20.23% return.
BNDW
- 1D
- -0.19%
- 1M
- 0.61%
- YTD
- 0.73%
- 6M
- 0.84%
- 1Y
- 3.26%
- 3Y*
- 4.05%
- 5Y*
- 0.25%
- 10Y*
- —
FAAR
- 1D
- -0.05%
- 1M
- -4.34%
- YTD
- 20.23%
- 6M
- 19.92%
- 1Y
- 26.86%
- 3Y*
- 10.91%
- 5Y*
- 7.89%
- 10Y*
- 4.79%
BNDW vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | |
|---|---|---|---|---|---|---|---|---|---|
BNDW Vanguard Total World Bond ETF | 0.73% | 5.02% | 2.42% | 7.18% | -12.88% | -2.10% | 6.22% | 8.37% | 1.27% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 20.23% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -6.79% |
Correlation
The correlation between BNDW and FAAR is -0.30, meaning they tend to move in opposite directions. This is especially valuable for risk management - when one declines, the other has historically tended to hold steady or rise.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | -0.30 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.14 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.12 |
Correlation (All Time) Calculated using the full available price history since Sep 6, 2018 | -0.10 |
Over the past year, the inverse relationship between BNDW and FAAR has strengthened: their correlation has moved from -0.10 to -0.30, meaning they now move in opposite directions more often than their long-term average.
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Return for Risk
BNDW vs. FAAR — Risk / Return Rank
BNDW
FAAR
BNDW vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Total World Bond ETF (BNDW) and First Trust Alternative Absolute Return Strategy ETF (FAAR). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| BNDW | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -1.05 | ||
| Sortino ratioReturn per unit of downside risk | -1.49 | ||
| Omega ratioGain probability vs. loss probability | 1.17 | 1.35 | -0.18 |
| Calmar ratioReturn relative to maximum drawdown | 1.21 | 4.75 | -3.54 |
| Martin ratioReturn relative to average drawdown | 3.27 | 14.70 | -11.43 |
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Drawdowns
BNDW vs. FAAR - Drawdown Comparison
The maximum BNDW drawdown since its inception was -17.22%, roughly equal to the maximum FAAR drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for BNDW and FAAR.
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Drawdown Indicators
| BNDW | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.22% | -18.03% | +0.81% |
Max Drawdown (1Y)Largest decline over 1 year | -2.70% | -5.68% | +2.98% |
Max Drawdown (3Y)Largest decline over 3 years | -4.27% | -11.54% | +7.27% |
Max Drawdown (5Y)Largest decline over 5 years | -16.93% | -18.03% | +1.10% |
Max Drawdown (10Y)Largest decline over 10 years | — | -18.03% | — |
Current DrawdownCurrent decline from peak | -1.23% | -5.43% | +4.20% |
Average DrawdownAverage peak-to-trough decline | -4.95% | -7.82% | +2.87% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.00% | 1.89% | -0.89% |
Volatility
BNDW vs. FAAR - Volatility Comparison
The current volatility for Vanguard Total World Bond ETF (BNDW) is 0.92%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.47%. This indicates that BNDW experiences smaller price fluctuations and is considered to be less risky than FAAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| BNDW | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.92% | 2.47% | -1.55% |
Volatility (6M)Calculated over the trailing 6-month period | 2.70% | 9.68% | -6.98% |
Volatility (1Y)Calculated over the trailing 1-year period | 3.36% | 13.37% | -10.01% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 5.22% | 12.95% | -7.73% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 4.89% | 11.53% | -6.64% |
BNDW vs. FAAR - Expense Ratio Comparison
BNDW has a 0.05% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
BNDW vs. FAAR - Dividend Comparison
BNDW's dividend yield for the trailing twelve months is around 4.20%, less than FAAR's 9.57% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|
BNDW Vanguard Total World Bond ETF | 4.20% | 4.12% | 3.90% | 3.73% | 2.02% | 2.58% | 1.56% | 3.05% | 1.66% | 0.00% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.57% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% |
Frequently Asked Questions
BNDW and FAAR have a correlation of -0.30, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
FAAR has higher volatility (2.47%) compared to BNDW (0.92%). In terms of maximum drawdown, BNDW dropped -17.22% vs FAAR's -18.03%.
On 5-year performance, FAAR leads with 7.89% vs 0.25% for BNDW. On fees, BNDW is cheaper at 0.05% per year. On volatility, BNDW has been the lower-risk option at 0.92%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 5-year period, FAAR has performed better with a 7.89% return vs 0.25%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
BNDW is cheaper with a 0.05% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.57%, compared with 4.20% for BNDW.
BNDW is categorized as Global Bonds, while FAAR is Commodities. They also come from different issuers: Vanguard and First Trust. Their fees differ too: 0.05% for BNDW and 0.95% for FAAR.
FAAR currently has the higher Sharpe Ratio (2.02 vs 0.98), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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