FREL vs. FAAR
FREL (Fidelity MSCI Real Estate Index ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - FREL is a REIT fund tracking the MSCI USA IMI Real Estate Index, while FAAR is a Commodities fund actively managed by First Trust. FREL is passively managed, while FAAR is actively managed. Over the past 10 years, FREL returned 5.72%/yr vs 4.74%/yr for FAAR. At a 0.01 correlation, their price movements are largely independent. FREL charges 0.08%/yr vs 0.95%/yr for FAAR.
Performance
FREL vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, FREL achieves a 8.97% return, which is significantly lower than FAAR's 20.28% return. Over the past 10 years, FREL has outperformed FAAR with an annualized return of 5.72%, while FAAR has yielded a comparatively lower 4.74% annualized return.
FREL
- 1D
- -0.04%
- 1M
- 0.34%
- YTD
- 8.97%
- 6M
- 9.40%
- 1Y
- 10.32%
- 3Y*
- 8.65%
- 5Y*
- 2.50%
- 10Y*
- 5.72%
FAAR
- 1D
- 0.31%
- 1M
- -5.25%
- YTD
- 20.28%
- 6M
- 21.67%
- 1Y
- 26.68%
- 3Y*
- 10.85%
- 5Y*
- 8.03%
- 10Y*
- 4.74%
FREL vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
FREL Fidelity MSCI Real Estate Index ETF | 8.97% | 3.09% | 5.05% | 11.74% | -26.21% | 40.46% | -4.99% | 28.78% | -4.52% | 8.86% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 20.28% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
Correlation
The correlation between FREL and FAAR is -0.07, meaning there is essentially no relationship between their price movements. Each responds to its own set of market drivers, making them strong candidates for combining in a diversified portfolio.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | -0.07 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.02 |
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 |
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Return for Risk
FREL vs. FAAR — Risk / Return Rank
FREL
FAAR
FREL vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Fidelity MSCI Real Estate Index ETF (FREL) 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.
| FREL | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -1.25 | ||
| Sortino ratioReturn per unit of downside risk | -1.76 | ||
| Omega ratioGain probability vs. loss probability | 1.14 | 1.34 | -0.20 |
| Calmar ratioReturn relative to maximum drawdown | 1.23 | 4.72 | -3.49 |
| Martin ratioReturn relative to average drawdown | 3.84 | 14.40 | -10.56 |
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Drawdowns
FREL vs. FAAR - Drawdown Comparison
The maximum FREL drawdown since its inception was -42.61%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for FREL and FAAR.
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Drawdown Indicators
| FREL | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -42.61% | -18.03% | -24.58% |
Max Drawdown (1Y)Largest decline over 1 year | -8.45% | -5.68% | -2.77% |
Max Drawdown (3Y)Largest decline over 3 years | -17.54% | -11.54% | -6.00% |
Max Drawdown (5Y)Largest decline over 5 years | -34.40% | -18.03% | -16.37% |
Max Drawdown (10Y)Largest decline over 10 years | -42.61% | -18.03% | -24.58% |
Current DrawdownCurrent decline from peak | -3.05% | -5.39% | +2.34% |
Average DrawdownAverage peak-to-trough decline | -9.92% | -7.83% | -2.09% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 2.69% | 1.87% | +0.82% |
Volatility
FREL vs. FAAR - Volatility Comparison
Fidelity MSCI Real Estate Index ETF (FREL) has a higher volatility of 5.03% compared to First Trust Alternative Absolute Return Strategy ETF (FAAR) at 2.50%. This indicates that FREL's price experiences larger fluctuations and is considered to be riskier than FAAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| FREL | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 5.03% | 2.50% | +2.53% |
Volatility (6M)Calculated over the trailing 6-month period | 10.11% | 9.71% | +0.40% |
Volatility (1Y)Calculated over the trailing 1-year period | 13.74% | 13.36% | +0.38% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 18.90% | 12.95% | +5.95% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 20.71% | 11.53% | +9.18% |
FREL vs. FAAR - Expense Ratio Comparison
FREL has a 0.08% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
FREL vs. FAAR - Dividend Comparison
FREL's dividend yield for the trailing twelve months is around 4.28%, less than FAAR's 9.57% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.57% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% | 0.00% | 0.00% |
FREL Fidelity MSCI Real Estate Index ETF | 4.28% | 3.59% | 3.48% | 3.73% | 3.57% | 2.34% | 3.77% | 3.32% | 5.54% | 3.27% | 4.01% | 3.80% |
Frequently Asked Questions
FREL and FAAR have a correlation of -0.07, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
FREL has higher volatility (5.03%) compared to FAAR (2.50%). In terms of maximum drawdown, FREL dropped -42.61% vs FAAR's -18.03%.
On 10-year performance, FREL leads with 5.72% vs 4.74% for FAAR. On fees, FREL is cheaper at 0.08% per year. On volatility, FAAR has been the lower-risk option at 2.50%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, FREL has performed better with a 5.72% return vs 4.74%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
FREL is cheaper with a 0.08% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.57%, compared with 4.28% for FREL.
FREL is categorized as REIT, while FAAR is Commodities. They also come from different issuers: Fidelity and First Trust. Their fees differ too: 0.08% for FREL and 0.95% for FAAR.
FAAR currently has the higher Sharpe Ratio (2.01 vs 0.75), 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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