FTCE vs. RAFE

Last updated Jul 14, 2026

FTCE (First Trust New Constructs Core Earnings Leaders ETF) and RAFE (PIMCO RAFI ESG U.S. ETF) are both Large Cap Blend Equities funds - FTCE tracks the Bloomberg New Constructs Core Earnings Leaders Index while RAFE tracks the RAFI ESG US Index. Both are passively managed. Over the past year, FTCE returned 23.07% vs 28.06% for RAFE. Their correlation of 0.85 suggests significant overlap in exposure. FTCE charges 0.60%/yr vs 0.30%/yr for RAFE.

Performance

FTCE vs. RAFE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust New Constructs Core Earnings Leaders ETF (FTCE) and PIMCO RAFI ESG U.S. ETF (RAFE). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FTCE achieves a 10.31% return, which is significantly lower than RAFE's 15.70% return.

FTCE

• 1D: -0.68%
• 1M: 0.48%
• 6M: 7.64%
• YTD: 10.31%
• 1Y: 23.07%
• 3Y*: —
• 5Y*: —
• 10Y*: —

RAFE

• 1D: -0.06%
• 1M: 1.59%
• 6M: 13.30%
• YTD: 15.70%
• 1Y: 28.06%
• 3Y*: 18.76%
• 5Y*: 11.46%
• 10Y*: —

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

FTCE vs. RAFE - Yearly Performance Comparison

	2026 (YTD)	2025	2024
FTCE First Trust New Constructs Core Earnings Leaders ETF	10.31%	26.14%	-0.02%
RAFE PIMCO RAFI ESG U.S. ETF	15.70%	17.60%	-0.38%

Correlation

The correlation between FTCE and RAFE is 0.81, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.82
Correlation (All Time) Calculated using the full available price history since Oct 3, 2024	0.85

The correlation between FTCE and RAFE has been stable across timeframes, ranging from 0.81 to 0.85 - a consistent structural relationship.

Return for Risk

FTCE vs. RAFE — Risk / Return Rank

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

FTCE

FTCE Risk / Return Rank: 61
FTCE Sharpe Ratio Rank: 65
FTCE Sortino Ratio Rank: 64
FTCE Omega Ratio Rank: 63
FTCE Calmar Ratio Rank: 57
FTCE Martin Ratio Rank: 56

RAFE

RAFE Risk / Return Rank: 89
RAFE Sharpe Ratio Rank: 91
RAFE Sortino Ratio Rank: 91
RAFE Omega Ratio Rank: 89
RAFE Calmar Ratio Rank: 86
RAFE Martin Ratio Rank: 88

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.

FTCE vs. RAFE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust New Constructs Core Earnings Leaders ETF (FTCE) and PIMCO RAFI ESG U.S. ETF (RAFE). 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.

	FTCE	RAFE	Difference
Sharpe ratio: Return per unit of total volatility	1.69	2.49	-0.80
Sortino ratio: Return per unit of downside risk	2.35	3.48	-1.14
Omega ratio: Gain probability vs. loss probability	1.30	1.45	-0.15
Calmar ratio: Return relative to maximum drawdown	2.28	3.78	-1.50
Martin ratio: Return relative to average drawdown	7.70	14.72	-7.02

FTCE vs. RAFE - Sharpe Ratio Comparison

The current FTCE Sharpe Ratio is 1.69, which is lower than the RAFE Sharpe Ratio of 2.49. The chart below compares the historical Sharpe Ratios of FTCE and RAFE, 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

FTCE vs. RAFE - Drawdown Comparison

The maximum FTCE drawdown since its inception was -18.11%, smaller than the maximum RAFE drawdown of -35.74%. Use the drawdown chart below to compare losses from any high point for FTCE and RAFE.

Drawdown Indicators

	FTCE	RAFE	Difference
Max Drawdown Largest peak-to-trough decline	-18.11%	-35.74%	+17.63%
Max Drawdown (1Y) Largest decline over 1 year	-10.16%	-7.46%	-2.70%
Max Drawdown (3Y) Largest decline over 3 years	—	-16.36%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-24.28%	—
Current Drawdown Current decline from peak	-3.82%	-0.06%	-3.76%
Average Drawdown Average peak-to-trough decline	-2.60%	-6.13%	+3.53%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.00%	1.91%	+1.09%

Volatility

FTCE vs. RAFE - Volatility Comparison

First Trust New Constructs Core Earnings Leaders ETF (FTCE) has a higher volatility of 3.79% compared to PIMCO RAFI ESG U.S. ETF (RAFE) at 2.78%. This indicates that FTCE's price experiences larger fluctuations and is considered to be riskier than RAFE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FTCE	RAFE	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.79%	2.78%	+1.01%
Volatility (6M) Calculated over the trailing 6-month period	11.14%	8.59%	+2.55%
Volatility (1Y) Calculated over the trailing 1-year period	13.72%	11.34%	+2.38%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.72%	15.07%	+1.65%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.72%	19.33%	-2.61%

FTCE vs. RAFE - Expense Ratio Comparison

FTCE has a 0.60% expense ratio, which is higher than RAFE's 0.30% expense ratio.

Dividends

FTCE vs. RAFE - Dividend Comparison

FTCE's dividend yield for the trailing twelve months is around 0.66%, less than RAFE's 1.49% yield.

Position	TTM	2025	2024	2023	2022	2021	2020
FTCE First Trust New Constructs Core Earnings Leaders ETF	0.66%	0.96%	0.28%	0.00%	0.00%	0.00%	0.00%
RAFE PIMCO RAFI ESG U.S. ETF	1.49%	1.67%	1.79%	1.81%	2.22%	1.42%	2.36%

Frequently Asked Questions

Can I hold both FTCE and RAFE in my portfolio?

FTCE and RAFE have a correlation of 0.81, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FTCE or RAFE?

FTCE has higher volatility (3.79%) compared to RAFE (2.78%). In terms of maximum drawdown, FTCE dropped -18.11% vs RAFE's -35.74%.

Which ETF is better, FTCE or RAFE?

On 1-year performance, RAFE leads with 28.06% vs 23.07% for FTCE. On fees, RAFE is cheaper at 0.30% per year. On volatility, RAFE has been the lower-risk option at 2.78%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FTCE or RAFE?

Over the 1-year period, RAFE has performed better with a 28.06% return vs 23.07%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FTCE or RAFE?

RAFE is cheaper with a 0.30% expense ratio, compared with 0.60% for FTCE.

Which ETF pays a higher dividend yield, FTCE or RAFE?

RAFE has the higher dividend yield at 1.49%, compared with 0.66% for FTCE.

What is the main difference between FTCE and RAFE?

FTCE tracks Bloomberg New Constructs Core Earnings Leaders Index, while RAFE tracks RAFI ESG US Index. They also come from different issuers: First Trust and PIMCO. Their fees differ too: 0.60% for FTCE and 0.30% for RAFE.

Which has better risk-adjusted returns?

RAFE currently has the higher Sharpe Ratio (2.49 vs 1.69), 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.