FAAR vs. XLP
FAAR (First Trust Alternative Absolute Return Strategy ETF) and XLP (State Street Consumer Staples Select Sector SPDR ETF) are both exchange-traded funds - FAAR is a Commodities fund actively managed by First Trust, while XLP is a Consumer Staples Equities fund tracking the Consumer Staples Select Sector Index. FAAR is actively managed, while XLP is passively managed. Over the past 10 years, FAAR returned 4.91%/yr vs 7.60%/yr for XLP. At a 0.01 correlation, their price movements are largely independent. FAAR charges 0.95%/yr vs 0.08%/yr for XLP.
Performance
FAAR vs. XLP - Performance Comparison
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Returns By Period
In the year-to-date period, FAAR achieves a 22.65% return, which is significantly higher than XLP's 11.10% return. Over the past 10 years, FAAR has underperformed XLP with an annualized return of 4.91%, while XLP has yielded a comparatively higher 7.60% annualized return.
FAAR
- 1D
- -0.36%
- 1M
- -3.07%
- YTD
- 22.65%
- 6M
- 22.23%
- 1Y
- 29.62%
- 3Y*
- 11.36%
- 5Y*
- 7.51%
- 10Y*
- 4.91%
XLP
- 1D
- 0.65%
- 1M
- 1.39%
- YTD
- 11.10%
- 6M
- 9.54%
- 1Y
- 8.93%
- 3Y*
- 8.26%
- 5Y*
- 6.65%
- 10Y*
- 7.60%
FAAR vs. XLP - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 22.65% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
XLP State Street Consumer Staples Select Sector SPDR ETF | 11.10% | 1.52% | 12.20% | -0.82% | -0.81% | 17.20% | 10.11% | 27.43% | -8.07% | 12.98% |
Correlation
The correlation between FAAR and XLP is -0.14, 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 | -0.14 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.04 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.02 |
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 |
The correlation between FAAR and XLP shifts across timeframes, from -0.14 (1 year) to 0.01 (10 years), reflecting how their relationship changes across market environments.
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Return for Risk
FAAR vs. XLP — Risk / Return Rank
FAAR
XLP
FAAR vs. XLP - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for First Trust Alternative Absolute Return Strategy ETF (FAAR) and State Street Consumer Staples Select Sector SPDR ETF (XLP). 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 | XLP | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +1.85 | ||
| Sortino ratioReturn per unit of downside risk | +2.54 | ||
| Omega ratioGain probability vs. loss probability | 1.42 | 1.11 | +0.31 |
| Calmar ratioReturn relative to maximum drawdown | 6.79 | 0.79 | +6.00 |
| Martin ratioReturn relative to average drawdown | 18.23 | 1.52 | +16.71 |
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Drawdowns
FAAR vs. XLP - Drawdown Comparison
The maximum FAAR drawdown since its inception was -18.03%, smaller than the maximum XLP drawdown of -35.90%. Use the drawdown chart below to compare losses from any high point for FAAR and XLP.
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Drawdown Indicators
| FAAR | XLP | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -18.03% | -35.90% | +17.87% |
Max Drawdown (1Y)Largest decline over 1 year | -4.85% | -9.69% | +4.84% |
Max Drawdown (3Y)Largest decline over 3 years | -11.54% | -12.39% | +0.85% |
Max Drawdown (5Y)Largest decline over 5 years | -18.03% | -16.30% | -1.73% |
Max Drawdown (10Y)Largest decline over 10 years | -18.03% | -24.51% | +6.48% |
Current DrawdownCurrent decline from peak | -3.52% | -4.12% | +0.60% |
Average DrawdownAverage peak-to-trough decline | -7.83% | -7.06% | -0.77% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.80% | 5.01% | -3.21% |
Volatility
FAAR vs. XLP - Volatility Comparison
The current volatility for First Trust Alternative Absolute Return Strategy ETF (FAAR) is 2.28%, while State Street Consumer Staples Select Sector SPDR ETF (XLP) has a volatility of 4.53%. This indicates that FAAR experiences smaller price fluctuations and is considered to be less risky than XLP based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| FAAR | XLP | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 2.28% | 4.53% | -2.25% |
Volatility (6M)Calculated over the trailing 6-month period | 9.69% | 10.14% | -0.45% |
Volatility (1Y)Calculated over the trailing 1-year period | 13.49% | 12.90% | +0.59% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 13.02% | 13.34% | -0.32% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 11.52% | 14.75% | -3.23% |
FAAR vs. XLP - Expense Ratio Comparison
FAAR has a 0.95% expense ratio, which is higher than XLP's 0.08% expense ratio.
Dividends
FAAR vs. XLP - Dividend Comparison
FAAR's dividend yield for the trailing twelve months is around 9.38%, more than XLP's 2.53% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.38% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% | 0.00% | 0.00% |
XLP State Street Consumer Staples Select Sector SPDR ETF | 2.53% | 2.75% | 2.77% | 2.63% | 2.47% | 2.28% | 2.50% | 2.57% | 3.04% | 2.62% | 2.53% | 2.52% |
Frequently Asked Questions
FAAR and XLP have a correlation of -0.14, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
XLP has higher volatility (4.53%) compared to FAAR (2.28%). In terms of maximum drawdown, FAAR dropped -18.03% vs XLP's -35.90%.
On 10-year performance, XLP leads with 7.60% vs 4.91% for FAAR. On fees, XLP is cheaper at 0.08% per year. On volatility, FAAR has been the lower-risk option at 2.28%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, XLP has performed better with a 7.60% return vs 4.91%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
XLP is cheaper with a 0.08% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.38%, compared with 2.53% for XLP.
FAAR is categorized as Commodities, while XLP is Consumer Staples Equities. They also come from different issuers: First Trust and State Street. Their fees differ too: 0.95% for FAAR and 0.08% for XLP.
FAAR currently has the higher Sharpe Ratio (2.44 vs 0.59), 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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