FAI vs. SMST

Last updated Jul 11, 2026

FAI (First Trust Bloomberg Artificial Intelligence ETF) and SMST (Defiance Daily Target 2X Short MSTR ETF) are both exchange-traded funds - FAI is a Technology Equities fund tracking the Bloomberg Artificial Intelligence Index, while SMST is a Inverse Equities fund actively managed by Defiance. FAI is passively managed, while SMST is actively managed. Over the past year, FAI returned 49.94% vs 223.04% for SMST. At a correlation of -0.49, they often move in opposite directions. FAI charges 0.65%/yr vs 1.29%/yr for SMST.

Performance

FAI vs. SMST - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust Bloomberg Artificial Intelligence ETF (FAI) and Defiance Daily Target 2X Short MSTR ETF (SMST). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FAI achieves a 28.90% return, which is significantly higher than SMST's -31.56% return.

FAI

• 1D: -0.41%
• 1M: 0.70%
• 6M: 25.51%
• YTD: 28.90%
• 1Y: 49.94%
• 3Y*: —
• 5Y*: —
• 10Y*: —

SMST

• 1D: -1.67%
• 1M: 37.17%
• 6M: -24.18%
• YTD: -31.56%
• 1Y: 223.04%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

FAI vs. SMST - Yearly Performance Comparison

	2026 (YTD)	2025	2024
FAI First Trust Bloomberg Artificial Intelligence ETF	28.90%	33.37%	2.28%
SMST Defiance Daily Target 2X Short MSTR ETF	-31.56%	-44.36%	74.48%

Correlation

The correlation between FAI and SMST is -0.46, 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	-0.46
Correlation (All Time) Calculated using the full available price history since Nov 21, 2024	-0.49

Return for Risk

FAI vs. SMST — Risk / Return Rank

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

FAI

FAI Risk / Return Rank: 62
FAI Sharpe Ratio Rank: 69
FAI Sortino Ratio Rank: 60
FAI Omega Ratio Rank: 62
FAI Calmar Ratio Rank: 66
FAI Martin Ratio Rank: 56

SMST

SMST Risk / Return Rank: 53
SMST Sharpe Ratio Rank: 49
SMST Sortino Ratio Rank: 58
SMST Omega Ratio Rank: 58
SMST Calmar Ratio Rank: 60
SMST Martin Ratio Rank: 38

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.

FAI vs. SMST - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust Bloomberg Artificial Intelligence ETF (FAI) and Defiance Daily Target 2X Short MSTR ETF (SMST). 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.

	FAI	SMST	Difference
Sharpe ratio: Return per unit of total volatility	1.78	1.37	+0.40
Sortino ratio: Return per unit of downside risk	2.27	2.22	+0.05
Omega ratio: Gain probability vs. loss probability	1.30	1.29	+0.01
Calmar ratio: Return relative to maximum drawdown	2.64	2.39	+0.24
Martin ratio: Return relative to average drawdown	7.77	4.64	+3.13

FAI vs. SMST - Sharpe Ratio Comparison

The current FAI Sharpe Ratio is 1.78, which is comparable to the SMST Sharpe Ratio of 1.37. The chart below compares the historical Sharpe Ratios of FAI and SMST, 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

FAI vs. SMST - Drawdown Comparison

The maximum FAI drawdown since its inception was -27.82%, smaller than the maximum SMST drawdown of -99.25%. Use the drawdown chart below to compare losses from any high point for FAI and SMST.

Drawdown Indicators

	FAI	SMST	Difference
Max Drawdown Largest peak-to-trough decline	-27.82%	-99.25%	+71.43%
Max Drawdown (1Y) Largest decline over 1 year	-18.84%	-85.39%	+66.55%
Current Drawdown Current decline from peak	-8.44%	-97.31%	+88.87%
Average Drawdown Average peak-to-trough decline	-5.48%	-90.88%	+85.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.38%	43.98%	-37.60%

Volatility

FAI vs. SMST - Volatility Comparison

The current volatility for First Trust Bloomberg Artificial Intelligence ETF (FAI) is 11.84%, while Defiance Daily Target 2X Short MSTR ETF (SMST) has a volatility of 56.47%. This indicates that FAI experiences smaller price fluctuations and is considered to be less risky than SMST based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FAI	SMST	Difference
Volatility (1M) Calculated over the trailing 1-month period	11.84%	56.47%	-44.63%
Volatility (6M) Calculated over the trailing 6-month period	23.56%	135.94%	-112.38%
Volatility (1Y) Calculated over the trailing 1-year period	27.99%	149.09%	-121.10%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	31.12%	167.87%	-136.75%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	31.12%	167.87%	-136.75%

FAI vs. SMST - Expense Ratio Comparison

FAI has a 0.65% expense ratio, which is lower than SMST's 1.29% expense ratio.

Dividends

FAI vs. SMST - Dividend Comparison

Neither FAI nor SMST has paid dividends to shareholders.

Position	TTM	2025	2024
FAI First Trust Bloomberg Artificial Intelligence ETF	0.00%	0.00%	0.04%
SMST Defiance Daily Target 2X Short MSTR ETF	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both FAI and SMST in my portfolio?

FAI and SMST have a correlation of -0.46, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FAI or SMST?

SMST has higher volatility (56.47%) compared to FAI (11.84%). In terms of maximum drawdown, FAI dropped -27.82% vs SMST's -99.25%.

Which ETF is better, FAI or SMST?

On 1-year performance, SMST leads with 223.04% vs 49.94% for FAI. On fees, FAI is cheaper at 0.65% per year. On volatility, FAI has been the lower-risk option at 11.84%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FAI or SMST?

Over the 1-year period, SMST has performed better with a 223.04% return vs 49.94%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FAI or SMST?

FAI is cheaper with a 0.65% expense ratio, compared with 1.29% for SMST.

Which ETF pays a higher dividend yield, FAI or SMST?

FAI and SMST have nearly identical dividend yields, around 0.00%.

What is the main difference between FAI and SMST?

FAI is categorized as Technology Equities, while SMST is Inverse Equities. They also come from different issuers: First Trust and Defiance. Their fees differ too: 0.65% for FAI and 1.29% for SMST.

Which has better risk-adjusted returns?

FAI currently has the higher Sharpe Ratio (1.77 vs 1.37), 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.