EMB vs. FAAR
EMB (iShares J.P. Morgan USD Emerging Markets Bond ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - EMB is a Emerging Markets Bonds fund tracking the J.P. Morgan EMBI Global Core Index, while FAAR is a Commodities fund actively managed by First Trust. EMB is passively managed, while FAAR is actively managed. Over the past 10 years, EMB returned 3.30%/yr vs 4.69%/yr for FAAR. At a correlation of -0.01, they often move in opposite directions. EMB charges 0.39%/yr vs 0.95%/yr for FAAR.
Performance
EMB vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, EMB achieves a 2.18% return, which is significantly lower than FAAR's 19.14% return. Over the past 10 years, EMB has underperformed FAAR with an annualized return of 3.30%, while FAAR has yielded a comparatively higher 4.69% annualized return.
EMB
- 1D
- -0.15%
- 1M
- 1.57%
- YTD
- 2.18%
- 6M
- 2.21%
- 1Y
- 10.82%
- 3Y*
- 9.37%
- 5Y*
- 1.88%
- 10Y*
- 3.30%
FAAR
- 1D
- -0.91%
- 1M
- -5.21%
- YTD
- 19.14%
- 6M
- 18.06%
- 1Y
- 28.33%
- 3Y*
- 10.57%
- 5Y*
- 7.72%
- 10Y*
- 4.69%
EMB vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
EMB iShares J.P. Morgan USD Emerging Markets Bond ETF | 2.18% | 13.85% | 5.54% | 10.62% | -18.63% | -2.23% | 5.42% | 15.48% | -5.47% | 10.28% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 19.14% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
Correlation
The correlation between EMB and FAAR is -0.23, 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 | -0.23 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.06 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.05 |
Correlation (10Y) Calculated over the trailing 10-year period | -0.01 |
Correlation (All Time) Calculated using the full available price history since May 23, 2016 | -0.01 |
Over the past year, the inverse relationship between EMB and FAAR has strengthened: their correlation has moved from -0.01 to -0.23, meaning they now move in opposite directions more often than their long-term average.
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Return for Risk
EMB vs. FAAR — Risk / Return Rank
EMB
FAAR
EMB vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) 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.
| EMB | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.24 | ||
| Sortino ratioReturn per unit of downside risk | -0.27 | ||
| Omega ratioGain probability vs. loss probability | 1.37 | 1.37 | 0.00 |
| Calmar ratioReturn relative to maximum drawdown | 2.41 | 4.52 | -2.11 |
| Martin ratioReturn relative to average drawdown | 10.26 | 15.18 | -4.91 |
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Drawdowns
EMB vs. FAAR - Drawdown Comparison
The maximum EMB drawdown since its inception was -34.70%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for EMB and FAAR.
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Drawdown Indicators
| EMB | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -34.70% | -18.03% | -16.67% |
Max Drawdown (1Y)Largest decline over 1 year | -4.51% | -6.29% | +1.78% |
Max Drawdown (3Y)Largest decline over 3 years | -7.95% | -11.54% | +3.59% |
Max Drawdown (5Y)Largest decline over 5 years | -28.74% | -18.03% | -10.71% |
Max Drawdown (10Y)Largest decline over 10 years | -28.74% | -18.03% | -10.71% |
Current DrawdownCurrent decline from peak | -0.49% | -6.29% | +5.80% |
Average DrawdownAverage peak-to-trough decline | -5.04% | -7.82% | +2.78% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.06% | 1.87% | -0.81% |
Volatility
EMB vs. FAAR - Volatility Comparison
The current volatility for iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) is 1.78%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.55%. This indicates that EMB 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
| EMB | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.78% | 2.55% | -0.77% |
Volatility (6M)Calculated over the trailing 6-month period | 4.68% | 9.68% | -5.00% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.68% | 13.38% | -7.70% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 9.76% | 12.96% | -3.20% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 9.96% | 11.54% | -1.58% |
EMB vs. FAAR - Expense Ratio Comparison
EMB has a 0.39% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
EMB vs. FAAR - Dividend Comparison
EMB's dividend yield for the trailing twelve months is around 5.04%, less than FAAR's 9.66% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
EMB iShares J.P. Morgan USD Emerging Markets Bond ETF | 5.04% | 4.98% | 5.46% | 4.74% | 5.04% | 3.89% | 3.88% | 4.51% | 5.64% | 4.54% | 4.83% | 4.84% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.66% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% | 0.00% | 0.00% |
Frequently Asked Questions
EMB and FAAR have a correlation of -0.23, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
FAAR has higher volatility (2.55%) compared to EMB (1.78%). In terms of maximum drawdown, EMB dropped -34.70% vs FAAR's -18.03%.
On 10-year performance, FAAR leads with 4.69% vs 3.30% for EMB. On fees, EMB is cheaper at 0.39% per year. On volatility, EMB has been the lower-risk option at 1.78%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, FAAR has performed better with a 4.69% return vs 3.30%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
EMB is cheaper with a 0.39% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.66%, compared with 5.04% for EMB.
EMB is categorized as Emerging Markets Bonds, while FAAR is Commodities. They also come from different issuers: iShares and First Trust. Their fees differ too: 0.39% for EMB and 0.95% for FAAR.
FAAR currently has the higher Sharpe Ratio (2.15 vs 1.91), 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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