IBHG vs. FAAR
IBHG (iShares iBonds 2027 Term High Yield and Income ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - IBHG is a High Yield Bonds fund tracking the Bloomberg 2027 Term High Yield and Income Index - Benchmark TR Gross, while FAAR is a Commodities fund actively managed by First Trust. IBHG is passively managed, while FAAR is actively managed. Over the past 3 years, IBHG returned 7.63%/yr vs 10.91%/yr for FAAR. At a correlation of -0.00, they often move in opposite directions. IBHG charges 0.35%/yr vs 0.95%/yr for FAAR.
Performance
IBHG vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, IBHG achieves a 1.17% return, which is significantly lower than FAAR's 20.23% return.
IBHG
- 1D
- 0.00%
- 1M
- 0.03%
- YTD
- 1.17%
- 6M
- 1.43%
- 1Y
- 4.55%
- 3Y*
- 7.63%
- 5Y*
- —
- 10Y*
- —
FAAR
- 1D
- -0.05%
- 1M
- -4.34%
- YTD
- 20.23%
- 6M
- 19.92%
- 1Y
- 26.86%
- 3Y*
- 10.91%
- 5Y*
- 7.89%
- 10Y*
- 4.79%
IBHG vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|---|
IBHG iShares iBonds 2027 Term High Yield and Income ETF | 1.17% | 6.90% | 7.42% | 11.27% | -8.88% | 0.93% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 20.23% | 8.07% | 5.97% | -5.63% | 10.15% | 2.19% |
Correlation
The correlation between IBHG and FAAR is -0.12, 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 | -0.12 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.04 |
Correlation (All Time) Calculated using the full available price history since Jul 9, 2021 | -0.00 |
The correlation between IBHG and FAAR shifts across timeframes, from -0.12 (1 year) to -0.00 (all time), reflecting how their relationship changes across market environments.
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Return for Risk
IBHG vs. FAAR — Risk / Return Rank
IBHG
FAAR
IBHG vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBonds 2027 Term High Yield and Income ETF (IBHG) 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.
| IBHG | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.17 | ||
| Sortino ratioReturn per unit of downside risk | +0.51 | ||
| Omega ratioGain probability vs. loss probability | 1.42 | 1.35 | +0.07 |
| Calmar ratioReturn relative to maximum drawdown | 6.29 | 4.75 | +1.54 |
| Martin ratioReturn relative to average drawdown | 22.89 | 14.70 | +8.19 |
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Drawdowns
IBHG vs. FAAR - Drawdown Comparison
The maximum IBHG drawdown since its inception was -13.85%, smaller than the maximum FAAR drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for IBHG and FAAR.
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Drawdown Indicators
| IBHG | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -13.85% | -18.03% | +4.18% |
Max Drawdown (1Y)Largest decline over 1 year | -0.73% | -5.68% | +4.95% |
Max Drawdown (3Y)Largest decline over 3 years | -3.39% | -11.54% | +8.15% |
Max Drawdown (5Y)Largest decline over 5 years | — | -18.03% | — |
Max Drawdown (10Y)Largest decline over 10 years | — | -18.03% | — |
Current DrawdownCurrent decline from peak | -0.02% | -5.43% | +5.41% |
Average DrawdownAverage peak-to-trough decline | -2.64% | -7.82% | +5.18% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.20% | 1.89% | -1.69% |
Volatility
IBHG vs. FAAR - Volatility Comparison
The current volatility for iShares iBonds 2027 Term High Yield and Income ETF (IBHG) is 0.44%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.47%. This indicates that IBHG 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.
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Volatility by Period
| IBHG | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.44% | 2.47% | -2.03% |
Volatility (6M)Calculated over the trailing 6-month period | 1.52% | 9.68% | -8.16% |
Volatility (1Y)Calculated over the trailing 1-year period | 2.09% | 13.37% | -11.28% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.33% | 12.95% | -6.62% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 6.33% | 11.53% | -5.20% |
IBHG vs. FAAR - Expense Ratio Comparison
IBHG has a 0.35% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
IBHG vs. FAAR - Dividend Comparison
IBHG's dividend yield for the trailing twelve months is around 6.07%, less than FAAR's 9.57% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|
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% |
IBHG iShares iBonds 2027 Term High Yield and Income ETF | 6.07% | 6.33% | 7.02% | 6.66% | 5.62% | 2.13% | 0.00% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
IBHG and FAAR have a correlation of -0.12, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
FAAR has higher volatility (2.47%) compared to IBHG (0.44%). In terms of maximum drawdown, IBHG dropped -13.85% vs FAAR's -18.03%.
On 3-year performance, FAAR leads with 10.91% vs 7.63% for IBHG. On fees, IBHG is cheaper at 0.35% per year. On volatility, IBHG has been the lower-risk option at 0.44%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 3-year period, FAAR has performed better with a 10.91% return vs 7.63%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
IBHG is cheaper with a 0.35% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.57%, compared with 6.07% for IBHG.
IBHG is categorized as High Yield Bonds, while FAAR is Commodities. They also come from different issuers: iShares and First Trust. Their fees differ too: 0.35% for IBHG and 0.95% for FAAR.
IBHG currently has the higher Sharpe Ratio (2.19 vs 2.02), 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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