FAAR vs. LQDW
FAAR (First Trust Alternative Absolute Return Strategy ETF) and LQDW (iShares Investment Grade Corporate Bond Buywrite Strategy ETF) are both exchange-traded funds - FAAR is a Commodities fund actively managed by First Trust, while LQDW is a Corporate Bonds fund tracking the CBOE LQD BuyWrite Index. FAAR is actively managed, while LQDW is passively managed. Over the past 3 years, FAAR returned 10.03%/yr vs 3.76%/yr for LQDW. At a correlation of -0.08, they often move in opposite directions. FAAR charges 0.95%/yr vs 0.34%/yr for LQDW.
Performance
FAAR vs. LQDW - Performance Comparison
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Returns By Period
In the year-to-date period, FAAR achieves a 17.40% return, which is significantly higher than LQDW's 2.05% return.
FAAR
- 1D
- -1.46%
- 1M
- -6.59%
- YTD
- 17.40%
- 6M
- 17.10%
- 1Y
- 28.26%
- 3Y*
- 10.03%
- 5Y*
- 7.50%
- 10Y*
- 4.54%
LQDW
- 1D
- 0.17%
- 1M
- 1.53%
- YTD
- 2.05%
- 6M
- 2.03%
- 1Y
- 6.46%
- 3Y*
- 3.76%
- 5Y*
- —
- 10Y*
- —
FAAR vs. LQDW - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | |
|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 17.40% | 8.07% | 5.97% | -5.63% | -2.29% |
LQDW iShares Investment Grade Corporate Bond Buywrite Strategy ETF | 2.05% | 9.05% | 2.60% | 3.99% | -6.78% |
Correlation
The correlation between FAAR and LQDW is -0.27, 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 | -0.27 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.08 |
Correlation (All Time) Calculated using the full available price history since Aug 22, 2022 | -0.08 |
The correlation between FAAR and LQDW shifts across timeframes, from -0.27 (1 year) to -0.08 (3 years), reflecting how their relationship changes across market environments.
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Return for Risk
FAAR vs. LQDW — Risk / Return Rank
FAAR
LQDW
FAAR vs. LQDW - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for First Trust Alternative Absolute Return Strategy ETF (FAAR) and iShares Investment Grade Corporate Bond Buywrite Strategy ETF (LQDW). 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.
| FAAR | LQDW | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.35 | ||
| Sortino ratioReturn per unit of downside risk | +0.55 | ||
| Omega ratioGain probability vs. loss probability | 1.37 | 1.36 | 0.00 |
| Calmar ratioReturn relative to maximum drawdown | 3.71 | 2.50 | +1.20 |
| Martin ratioReturn relative to average drawdown | 14.66 | 9.30 | +5.37 |
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Drawdowns
FAAR vs. LQDW - Drawdown Comparison
The maximum FAAR drawdown since its inception was -18.03%, which is greater than LQDW's maximum drawdown of -9.20%. Use the drawdown chart below to compare losses from any high point for FAAR and LQDW.
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Drawdown Indicators
| FAAR | LQDW | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -18.03% | -9.20% | -8.83% |
Max Drawdown (1Y)Largest decline over 1 year | -7.66% | -2.59% | -5.07% |
Max Drawdown (3Y)Largest decline over 3 years | -11.54% | -6.74% | -4.80% |
Max Drawdown (5Y)Largest decline over 5 years | -18.03% | — | — |
Max Drawdown (10Y)Largest decline over 10 years | -18.03% | — | — |
Current DrawdownCurrent decline from peak | -7.66% | 0.00% | -7.66% |
Average DrawdownAverage peak-to-trough decline | -7.82% | -2.31% | -5.51% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.93% | 0.70% | +1.23% |
Volatility
FAAR vs. LQDW - Volatility Comparison
First Trust Alternative Absolute Return Strategy ETF (FAAR) has a higher volatility of 2.82% compared to iShares Investment Grade Corporate Bond Buywrite Strategy ETF (LQDW) at 1.00%. This indicates that FAAR's price experiences larger fluctuations and is considered to be riskier than LQDW based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| FAAR | LQDW | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 2.82% | 1.00% | +1.82% |
Volatility (6M)Calculated over the trailing 6-month period | 9.80% | 3.12% | +6.68% |
Volatility (1Y)Calculated over the trailing 1-year period | 13.30% | 3.62% | +9.68% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 12.97% | 5.47% | +7.50% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 11.55% | 5.47% | +6.08% |
FAAR vs. LQDW - Expense Ratio Comparison
FAAR has a 0.95% expense ratio, which is higher than LQDW's 0.34% expense ratio.
Dividends
FAAR vs. LQDW - Dividend Comparison
FAAR's dividend yield for the trailing twelve months is around 9.80%, less than LQDW's 12.47% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.80% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% |
LQDW iShares Investment Grade Corporate Bond Buywrite Strategy ETF | 12.47% | 16.02% | 15.74% | 19.28% | 8.85% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
FAAR and LQDW have a correlation of -0.27, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
FAAR has higher volatility (2.82%) compared to LQDW (1.00%). In terms of maximum drawdown, FAAR dropped -18.03% vs LQDW's -9.20%.
On 3-year performance, FAAR leads with 10.03% vs 3.76% for LQDW. On fees, LQDW is cheaper at 0.34% per year. On volatility, LQDW has been the lower-risk option at 1.00%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 3-year period, FAAR has performed better with a 10.03% return vs 3.76%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
LQDW is cheaper with a 0.34% expense ratio, compared with 0.95% for FAAR.
LQDW has the higher dividend yield at 12.47%, compared with 9.80% for FAAR.
FAAR is categorized as Commodities, while LQDW is Corporate Bonds. They also come from different issuers: First Trust and iShares. Their fees differ too: 0.95% for FAAR and 0.34% for LQDW.
FAAR currently has the higher Sharpe Ratio (2.15 vs 1.79), 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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