FBDC vs. SMST

Last updated Aug 2, 2026

FBDC (FT Confluence BDC & Specialty Finance Income ETF) and SMST (Defiance Daily Target 2X Short MSTR ETF) are both exchange-traded funds - FBDC is a Financials Equities fund actively managed by First Trust, while SMST is a Inverse Equities fund actively managed by Defiance. Both are actively managed. Over the past year, FBDC returned -10.92% vs 128.37% for SMST. Their -0.33 correlation means they have often moved in opposite directions in the past. FBDC charges 1.35%/yr vs 1.29%/yr for SMST.

Performance

FBDC vs. SMST - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in FT Confluence BDC & Specialty Finance Income ETF (FBDC) 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, FBDC achieves a -7.31% return, which is significantly higher than SMST's -35.77% return.

FBDC

• 1D: -0.01%
• 1M: -0.49%
• 6M: -6.64%
• YTD: -7.31%
• 1Y: -10.92%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: -9.05%

SMST

• 1D: 8.37%
• 1M: 5.47%
• 6M: -29.35%
• YTD: -35.77%
• 1Y: 128.37%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: -83.68%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
FBDC FT Confluence BDC & Specialty Finance Income ETF	$213.26K	$189.97K	$198.06K
SMST Defiance Daily Target 2X Short MSTR ETF	$15.35M	$15.12M	$17.58M

FBDC vs. SMST - Yearly Performance Comparison

	2026 (YTD)	2025
FBDC FT Confluence BDC & Specialty Finance Income ETF	-7.31%	-2.66%
SMST Defiance Daily Target 2X Short MSTR ETF	-35.77%	246.53%

Correlation

The correlation between FBDC and SMST is -0.32, meaning they have often moved in opposite directions in the past. This relationship can weaken or reverse as market conditions change.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	-0.32
Correlation (All Time) Calculated using the full available price history since Jun 30, 2025	-0.33

Return for Risk

FBDC vs. SMST — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

FBDC

FBDC Risk / Return Rank: 4
FBDC Sharpe Ratio Rank: 4
FBDC Sortino Ratio Rank: 4
FBDC Omega Ratio Rank: 4
FBDC Calmar Ratio Rank: 4
FBDC Martin Ratio Rank: 4

SMST

SMST Risk / Return Rank: 52
SMST Sharpe Ratio Rank: 45
SMST Sortino Ratio Rank: 62
SMST Omega Ratio Rank: 61
SMST Calmar Ratio Rank: 56
SMST Martin Ratio Rank: 36

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

FBDC vs. SMST - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for FT Confluence BDC & Specialty Finance Income ETF (FBDC) 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.

	FBDC	SMST	Difference
Sharpe ratio: Return per unit of total volatility	-0.64	1.13	-1.77
Sortino ratio: Return per unit of downside risk	-0.82	2.09	-2.91
Omega ratio: Gain probability vs. loss probability	0.91	1.27	-0.36
Calmar ratio: Return relative to maximum drawdown	-0.64	2.00	-2.64
Martin ratio: Return relative to average drawdown	-1.14	3.68	-4.82

FBDC vs. SMST - Sharpe Ratio Comparison

The current FBDC Sharpe Ratio is -0.64, which is lower than the SMST Sharpe Ratio of 1.13. The chart below compares the historical Sharpe Ratios of FBDC 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

FBDC vs. SMST - Drawdown Comparison

The maximum FBDC drawdown since its inception was -20.60%, smaller than the maximum SMST drawdown of -99.25%. Use the drawdown chart below to compare losses from any high point for FBDC and SMST.

Drawdown Indicators

	FBDC	SMST	Difference
Max Drawdown Largest peak-to-trough decline	-20.60%	-99.25%	+78.65%
Max Drawdown (1Y) Largest decline over 1 year	-18.08%	-85.39%	+67.31%
Current Drawdown Current decline from peak	-15.23%	-97.48%	+82.25%
Average Drawdown Average peak-to-trough decline	-10.91%	-91.08%	+80.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	10.12%	46.35%	-36.23%

Volatility

FBDC vs. SMST - Volatility Comparison

The current volatility for FT Confluence BDC & Specialty Finance Income ETF (FBDC) is 4.72%, while Defiance Daily Target 2X Short MSTR ETF (SMST) has a volatility of 38.14%. This indicates that FBDC 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

	FBDC	SMST	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.72%	38.14%	-33.42%
Volatility (6M) Calculated over the trailing 6-month period	14.60%	135.29%	-120.69%
Volatility (1Y) Calculated over the trailing 1-year period	18.15%	151.04%	-132.89%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.81%	166.75%	-148.94%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.81%	166.75%	-148.94%

FBDC vs. SMST - Expense Ratio Comparison

FBDC has a 1.35% expense ratio, which is higher than SMST's 1.29% expense ratio.

Dividends

FBDC vs. SMST - Dividend Comparison

FBDC's dividend yield for the trailing twelve months is around 12.36%, while SMST has not paid dividends to shareholders.

Position	TTM	2025
FBDC FT Confluence BDC & Specialty Finance Income ETF	12.36%	5.41%
SMST Defiance Daily Target 2X Short MSTR ETF	0.00%	0.00%

Frequently Asked Questions

Can I hold both FBDC and SMST in my portfolio?

FBDC and SMST have a correlation of -0.32, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FBDC or SMST?

SMST has higher volatility (38.14%) compared to FBDC (4.72%). In terms of maximum drawdown, FBDC dropped -20.60% vs SMST's -99.25%.

Which ETF is better, FBDC or SMST?

On 1-year performance, SMST leads with 128.37% vs -10.92% for FBDC. On fees, SMST is cheaper at 1.29% per year. On volatility, FBDC has been the lower-risk option at 4.72%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FBDC or SMST?

Over the 1-year period, SMST has performed better with a 128.37% return vs -10.92%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FBDC or SMST?

SMST is cheaper with a 1.29% expense ratio, compared with 1.35% for FBDC.

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

FBDC has the higher dividend yield at 12.36%, compared with 0.00% for SMST.

What is the main difference between FBDC and SMST?

FBDC is categorized as Financials Equities, while SMST is Inverse Equities. They also come from different issuers: First Trust and Defiance. Their fees differ too: 1.35% for FBDC and 1.29% for SMST.

Which has better risk-adjusted returns?

SMST currently has the higher Sharpe Ratio (1.13 vs -0.64), 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.