FAAR vs. USE

Last updated Jun 3, 2026

FAAR (First Trust Alternative Absolute Return Strategy ETF) and USE (USCF Energy Commodity Strategy Absolute Return Fund) are both Commodities funds. Both are actively managed. Over the past 3 years, FAAR returned 11.78%/yr vs 16.79%/yr for USE. A 0.51 correlation means they provide meaningful diversification when combined. FAAR charges 0.95%/yr vs 0.79%/yr for USE.

Performance

FAAR vs. USE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust Alternative Absolute Return Strategy ETF (FAAR) and USCF Energy Commodity Strategy Absolute Return Fund (USE). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FAAR achieves a 25.71% return, which is significantly lower than USE's 44.71% return.

FAAR

• 1D: 0.15%
• 1M: -0.61%
• YTD: 25.71%
• 6M: 23.52%
• 1Y: 41.39%
• 3Y*: 11.78%
• 5Y*: 8.35%
• 10Y*: 5.17%

USE

• 1D: 0.95%
• 1M: -2.42%
• YTD: 44.71%
• 6M: 45.41%
• 1Y: 38.15%
• 3Y*: 16.79%
• 5Y*: —
• 10Y*: —

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

FAAR vs. USE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
FAAR First Trust Alternative Absolute Return Strategy ETF	25.71%	8.07%	5.97%	-2.94%
USE USCF Energy Commodity Strategy Absolute Return Fund	44.71%	-14.97%	22.58%	9.98%

Correlation

The correlation between FAAR and USE is 0.58, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.58
Correlation (3Y) Calculated over the trailing 3-year period	0.53
Correlation (All Time) Calculated using the full available price history since May 5, 2023	0.51

The correlation between FAAR and USE has been stable across timeframes, ranging from 0.51 to 0.58 - a consistent structural relationship.

FAAR vs. USE - Sectors Allocation Comparison

Sectors	FAAR	USE
Financial Services	100.0%	23.5%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Industrials	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

FAAR vs. USE — Risk / Return Rank

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

FAAR

FAAR Risk / Return Rank: 91
FAAR Sharpe Ratio Rank: 89
FAAR Sortino Ratio Rank: 91
FAAR Omega Ratio Rank: 85
FAAR Calmar Ratio Rank: 95
FAAR Martin Ratio Rank: 93

USE

USE Risk / Return Rank: 31
USE Sharpe Ratio Rank: 33
USE Sortino Ratio Rank: 34
USE Omega Ratio Rank: 32
USE Calmar Ratio Rank: 31
USE Martin Ratio Rank: 23

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.

FAAR vs. USE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust Alternative Absolute Return Strategy ETF (FAAR) and USCF Energy Commodity Strategy Absolute Return Fund (USE). 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.

	FAAR	USE	Difference
Sharpe ratio Return per unit of total volatility	3.09	1.22	+1.86
Sortino ratio Return per unit of downside risk	4.29	1.83	+2.46
Omega ratio Gain probability vs. loss probability	1.53	1.22	+0.31
Calmar ratio Return relative to maximum drawdown	8.69	1.58	+7.11
Martin ratio Return relative to average drawdown	24.41	3.12	+21.29
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

FAAR vs. USE - Sharpe Ratio Comparison

The current FAAR Sharpe Ratio is 3.09, which is higher than the USE Sharpe Ratio of 1.22. The chart below compares the historical Sharpe Ratios of FAAR and USE, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	FAAR	USE	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.09	1.22	+1.86
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.64	—	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.45	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.45	0.67	-0.22

Drawdowns

FAAR vs. USE - Drawdown Comparison

The maximum FAAR drawdown since its inception was -18.03%, smaller than the maximum USE drawdown of -26.24%. Use the drawdown chart below to compare losses from any high point for FAAR and USE.

Drawdown Indicators

	FAAR	USE	Difference
Max Drawdown Largest peak-to-trough decline	-18.03%	-26.24%	+8.21%
Max Drawdown (1Y) Largest decline over 1 year	-4.85%	-26.24%	+21.39%
Max Drawdown (3Y) Largest decline over 3 years	-11.54%	-26.24%	+14.70%
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	-1.12%	-7.00%	+5.88%
Average Drawdown Average peak-to-trough decline	-7.85%	-7.96%	+0.11%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.73%	13.32%	-11.59%

Volatility

FAAR vs. USE - Volatility Comparison

The current volatility for First Trust Alternative Absolute Return Strategy ETF (FAAR) is 2.45%, while USCF Energy Commodity Strategy Absolute Return Fund (USE) has a volatility of 11.27%. This indicates that FAAR experiences smaller price fluctuations and is considered to be less risky than USE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FAAR	USE	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.45%	11.27%	-8.82%
Volatility (6M) Calculated over the trailing 6-month period	9.73%	25.77%	-16.04%
Volatility (1Y) Calculated over the trailing 1-year period	13.48%	31.43%	-17.95%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	13.03%	27.03%	-14.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	11.51%	27.03%	-15.52%

FAAR vs. USE - Expense Ratio Comparison

FAAR has a 0.95% expense ratio, which is higher than USE's 0.79% expense ratio.

Dividends

FAAR vs. USE - Dividend Comparison

FAAR's dividend yield for the trailing twelve months is around 9.15%, more than USE's 2.11% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017
FAAR First Trust Alternative Absolute Return Strategy ETF	9.15%	11.63%	3.45%	3.20%	5.82%	6.49%	3.05%	1.02%	0.58%	2.83%
USE USCF Energy Commodity Strategy Absolute Return Fund	2.11%	3.06%	38.65%	4.83%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both FAAR and USE in my portfolio?

FAAR and USE have a correlation of 0.58, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FAAR or USE?

USE has higher volatility (11.27%) compared to FAAR (2.45%). In terms of maximum drawdown, FAAR dropped -18.03% vs USE's -26.24%.

Which ETF is better, FAAR or USE?

On 3-year performance, USE leads with 16.79% vs 11.78% for FAAR. On fees, USE is cheaper at 0.79% per year. On volatility, FAAR has been the lower-risk option at 2.45%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FAAR or USE?

Over the 3-year period, USE has performed better with a 16.79% return vs 11.78%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FAAR or USE?

USE is cheaper with a 0.79% expense ratio, compared with 0.95% for FAAR.

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

FAAR has the higher dividend yield at 9.15%, compared with 2.11% for USE.

What is the main difference between FAAR and USE?

They also come from different issuers: First Trust and USCF. Their fees differ too: 0.95% for FAAR and 0.79% for USE.

Which has better risk-adjusted returns?

FAAR currently has the higher Sharpe Ratio (3.09 vs 1.22), 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.