FMB vs. FAAR
FMB (First Trust Managed Municipal ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - FMB is a Municipal Bonds fund actively managed by First Trust, while FAAR is a Commodities fund actively managed by First Trust. Both are actively managed. Over the past 10 years, FMB returned 2.22%/yr vs 4.54%/yr for FAAR. At a correlation of -0.01, they often move in opposite directions. FMB charges 0.50%/yr vs 0.95%/yr for FAAR.
Performance
FMB vs. FAAR - Performance Comparison
Loading charts...
Returns By Period
In the year-to-date period, FMB achieves a 2.17% return, which is significantly lower than FAAR's 17.40% return. Over the past 10 years, FMB has underperformed FAAR with an annualized return of 2.22%, while FAAR has yielded a comparatively higher 4.54% annualized return.
FMB
- 1D
- 0.21%
- 1M
- 1.56%
- YTD
- 2.17%
- 6M
- 2.14%
- 1Y
- 6.93%
- 3Y*
- 3.78%
- 5Y*
- 0.81%
- 10Y*
- 2.22%
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%
FMB vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
FMB First Trust Managed Municipal ETF | 2.17% | 3.73% | 1.94% | 6.31% | -9.91% | 2.43% | 4.44% | 8.25% | 0.89% | 7.22% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 17.40% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
Correlation
The correlation between FMB and FAAR is -0.16, 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 | -0.16 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.05 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.04 |
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 FMB and FAAR shifts across timeframes, from -0.16 (1 year) to -0.01 (10 years), reflecting how their relationship changes across market environments.
Compare stocks, funds, or ETFs
Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.
Return for Risk
FMB vs. FAAR — Risk / Return Rank
FMB
FAAR
FMB vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for First Trust Managed Municipal ETF (FMB) and First Trust Alternative Absolute Return Strategy ETF (FAAR). 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.
| FMB | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.49 | ||
| Sortino ratioReturn per unit of downside risk | +0.77 | ||
| Omega ratioGain probability vs. loss probability | 1.58 | 1.37 | +0.22 |
| Calmar ratioReturn relative to maximum drawdown | 2.55 | 3.71 | -1.16 |
| Martin ratioReturn relative to average drawdown | 9.08 | 14.66 | -5.58 |
Loading charts...
Drawdowns
FMB vs. FAAR - Drawdown Comparison
The maximum FMB drawdown since its inception was -14.16%, smaller than the maximum FAAR drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for FMB and FAAR.
Loading charts...
Drawdown Indicators
| FMB | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -14.16% | -18.03% | +3.87% |
Max Drawdown (1Y)Largest decline over 1 year | -2.73% | -7.66% | +4.93% |
Max Drawdown (3Y)Largest decline over 3 years | -4.76% | -11.54% | +6.78% |
Max Drawdown (5Y)Largest decline over 5 years | -14.16% | -18.03% | +3.87% |
Max Drawdown (10Y)Largest decline over 10 years | -14.16% | -18.03% | +3.87% |
Current DrawdownCurrent decline from peak | -0.11% | -7.66% | +7.55% |
Average DrawdownAverage peak-to-trough decline | -2.60% | -7.82% | +5.22% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.77% | 1.93% | -1.16% |
Volatility
FMB vs. FAAR - Volatility Comparison
The current volatility for First Trust Managed Municipal ETF (FMB) is 0.76%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.82%. This indicates that FMB experiences smaller price fluctuations and is considered to be less risky than FAAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
Loading charts...
Volatility by Period
| FMB | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.76% | 2.82% | -2.06% |
Volatility (6M)Calculated over the trailing 6-month period | 1.97% | 9.80% | -7.83% |
Volatility (1Y)Calculated over the trailing 1-year period | 2.64% | 13.30% | -10.66% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 3.71% | 12.97% | -9.26% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 4.53% | 11.55% | -7.02% |
FMB vs. FAAR - Expense Ratio Comparison
FMB has a 0.50% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
FMB vs. FAAR - Dividend Comparison
FMB's dividend yield for the trailing twelve months is around 3.49%, less than FAAR's 9.80% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
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% | 0.00% | 0.00% |
FMB First Trust Managed Municipal ETF | 3.49% | 3.37% | 3.22% | 2.98% | 2.47% | 1.96% | 2.19% | 2.47% | 2.58% | 2.49% | 2.93% | 3.07% |
Frequently Asked Questions
FMB and FAAR have a correlation of -0.16, 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 FMB (0.76%). In terms of maximum drawdown, FMB dropped -14.16% vs FAAR's -18.03%.
On 10-year performance, FAAR leads with 4.54% vs 2.22% for FMB. On fees, FMB is cheaper at 0.50% per year. On volatility, FMB has been the lower-risk option at 0.76%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, FAAR has performed better with a 4.54% return vs 2.22%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
FMB is cheaper with a 0.50% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.80%, compared with 3.49% for FMB.
FMB is categorized as Municipal Bonds, while FAAR is Commodities. Their fees differ too: 0.50% for FMB and 0.95% for FAAR.
FMB currently has the higher Sharpe Ratio (2.63 vs 2.15), 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.
Find the right allocation for FMB and FAAR
Add both to a portfolio and optimize allocations for your target — whether that's maximizing returns, minimizing drawdowns, or balancing risk across holdings.
Open Portfolio Optimizer