EMOT vs. FAAR

Last updated Jun 21, 2026

EMOT (First Trust S&P 500 Economic Moat ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - EMOT is a S&P 500 fund tracking the S&P 500 Economic Moat Index, while FAAR is a Commodities fund actively managed by First Trust. EMOT is passively managed, while FAAR is actively managed. Over the past year, EMOT returned 20.02% vs 26.86% for FAAR. At a correlation of -0.04, they often move in opposite directions. EMOT charges 0.60%/yr vs 0.95%/yr for FAAR.

Performance

EMOT vs. FAAR - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust S&P 500 Economic Moat ETF (EMOT) and First Trust Alternative Absolute Return Strategy ETF (FAAR). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, EMOT achieves a 10.84% return, which is significantly lower than FAAR's 20.23% return.

EMOT

• 1D: 1.04%
• 1M: 1.07%
• YTD: 10.84%
• 6M: 10.58%
• 1Y: 20.02%
• 3Y*: —
• 5Y*: —
• 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%

*Multi-year figures are annualized to reflect compound growth (CAGR)

EMOT vs. FAAR - Yearly Performance Comparison

	2026 (YTD)	2025	2024
EMOT First Trust S&P 500 Economic Moat ETF	10.84%	14.17%	5.53%
FAAR First Trust Alternative Absolute Return Strategy ETF	20.23%	8.07%	0.83%

Correlation

The correlation between EMOT and FAAR is -0.12, 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	-0.12
Correlation (All Time) Calculated using the full available price history since Jun 27, 2024	-0.04

Return for Risk

EMOT vs. FAAR — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

EMOT

EMOT Risk / Return Rank: 49
EMOT Sharpe Ratio Rank: 50
EMOT Sortino Ratio Rank: 50
EMOT Omega Ratio Rank: 47
EMOT Calmar Ratio Rank: 44
EMOT Martin Ratio Rank: 51

FAAR

FAAR Risk / Return Rank: 70
FAAR Sharpe Ratio Rank: 64
FAAR Sortino Ratio Rank: 65
FAAR Omega Ratio Rank: 58
FAAR Calmar Ratio Rank: 87
FAAR Martin Ratio Rank: 78

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

EMOT vs. FAAR - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust S&P 500 Economic Moat ETF (EMOT) 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.

	EMOT	FAAR	Difference
Sharpe ratio: Return per unit of total volatility	1.68	2.02	-0.35
Sortino ratio: Return per unit of downside risk	2.39	2.89	-0.50
Omega ratio: Gain probability vs. loss probability	1.29	1.35	-0.05
Calmar ratio: Return relative to maximum drawdown	2.13	4.75	-2.62
Martin ratio: Return relative to average drawdown	8.35	14.70	-6.35

EMOT vs. FAAR - Sharpe Ratio Comparison

The current EMOT Sharpe Ratio is 1.68, which is comparable to the FAAR Sharpe Ratio of 2.02. The chart below compares the historical Sharpe Ratios of EMOT and FAAR, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

EMOT vs. FAAR - Drawdown Comparison

The maximum EMOT drawdown since its inception was -16.41%, smaller than the maximum FAAR drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for EMOT and FAAR.

Drawdown Indicators

	EMOT	FAAR	Difference
Max Drawdown Largest peak-to-trough decline	-16.41%	-18.03%	+1.62%
Max Drawdown (1Y) Largest decline over 1 year	-9.19%	-5.68%	-3.51%
Max Drawdown (3Y) Largest decline over 3 years	—	-11.54%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-18.03%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-18.03%	—
Current Drawdown Current decline from peak	-1.17%	-5.43%	+4.26%
Average Drawdown Average peak-to-trough decline	-2.06%	-7.82%	+5.76%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.34%	1.89%	+0.45%

Volatility

EMOT vs. FAAR - Volatility Comparison

First Trust S&P 500 Economic Moat ETF (EMOT) has a higher volatility of 3.94% compared to First Trust Alternative Absolute Return Strategy ETF (FAAR) at 2.47%. This indicates that EMOT's price experiences larger fluctuations and is considered to be riskier than FAAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	EMOT	FAAR	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.94%	2.47%	+1.47%
Volatility (6M) Calculated over the trailing 6-month period	8.98%	9.68%	-0.70%
Volatility (1Y) Calculated over the trailing 1-year period	11.67%	13.37%	-1.70%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.94%	12.95%	+1.99%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	14.94%	11.53%	+3.41%

EMOT vs. FAAR - Expense Ratio Comparison

EMOT has a 0.60% expense ratio, which is lower than FAAR's 0.95% expense ratio.

Dividends

EMOT vs. FAAR - Dividend Comparison

EMOT's dividend yield for the trailing twelve months is around 1.07%, less than FAAR's 9.57% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017
EMOT First Trust S&P 500 Economic Moat ETF	1.07%	0.84%	0.37%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	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

Can I hold both EMOT and FAAR in my portfolio?

EMOT and FAAR have a correlation of -0.12, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, EMOT or FAAR?

EMOT has higher volatility (3.94%) compared to FAAR (2.47%). In terms of maximum drawdown, EMOT dropped -16.41% vs FAAR's -18.03%.

Which ETF is better, EMOT or FAAR?

On 1-year performance, FAAR leads with 26.86% vs 20.02% for EMOT. On fees, EMOT is cheaper at 0.60% per year. On volatility, FAAR has been the lower-risk option at 2.47%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, EMOT or FAAR?

Over the 1-year period, FAAR has performed better with a 26.86% return vs 20.02%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, EMOT or FAAR?

EMOT is cheaper with a 0.60% expense ratio, compared with 0.95% for FAAR.

Which ETF pays a higher dividend yield, EMOT or FAAR?

FAAR has the higher dividend yield at 9.57%, compared with 1.07% for EMOT.

What is the main difference between EMOT and FAAR?

EMOT is categorized as S&P 500, while FAAR is Commodities. Their fees differ too: 0.60% for EMOT and 0.95% for FAAR.

Which has better risk-adjusted returns?

FAAR currently has the higher Sharpe Ratio (2.02 vs 1.68), 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.