MBSD vs. FAAR
MBSD (FlexShares Disciplined Duration MBS Index Fund) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - MBSD is a Mortgage Backed Securities fund tracking the ICE BofA Constrained Duration US Mortgage Backed Securities, while FAAR is a Commodities fund actively managed by First Trust. MBSD is passively managed, while FAAR is actively managed. Over the past 10 years, MBSD returned 1.37%/yr vs 4.79%/yr for FAAR. At a correlation of -0.04, they often move in opposite directions. MBSD charges 0.20%/yr vs 0.95%/yr for FAAR.
Performance
MBSD vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, MBSD achieves a 0.51% return, which is significantly lower than FAAR's 20.23% return. Over the past 10 years, MBSD has underperformed FAAR with an annualized return of 1.37%, while FAAR has yielded a comparatively higher 4.79% annualized return.
MBSD
- 1D
- -0.21%
- 1M
- 0.36%
- YTD
- 0.51%
- 6M
- 0.48%
- 1Y
- 4.60%
- 3Y*
- 4.23%
- 5Y*
- 0.71%
- 10Y*
- 1.37%
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%
MBSD vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
MBSD FlexShares Disciplined Duration MBS Index Fund | 0.51% | 7.12% | 2.30% | 4.46% | -9.49% | -1.40% | 5.43% | 6.05% | 0.32% | 0.86% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 20.23% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
Correlation
The correlation between MBSD and FAAR is -0.22, 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 | -0.22 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.11 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.07 |
Correlation (10Y) Calculated over the trailing 10-year period | -0.05 |
Correlation (All Time) Calculated using the full available price history since May 23, 2016 | -0.04 |
The correlation between MBSD and FAAR shifts across timeframes, from -0.22 (1 year) to -0.04 (all time), reflecting how their relationship changes across market environments.
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Return for Risk
MBSD vs. FAAR — Risk / Return Rank
MBSD
FAAR
MBSD vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for FlexShares Disciplined Duration MBS Index Fund (MBSD) 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.
| MBSD | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.70 | ||
| Sortino ratioReturn per unit of downside risk | -0.95 | ||
| Omega ratioGain probability vs. loss probability | 1.24 | 1.35 | -0.11 |
| Calmar ratioReturn relative to maximum drawdown | 2.12 | 4.75 | -2.62 |
| Martin ratioReturn relative to average drawdown | 6.39 | 14.70 | -8.31 |
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Drawdowns
MBSD vs. FAAR - Drawdown Comparison
The maximum MBSD drawdown since its inception was -14.36%, smaller than the maximum FAAR drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for MBSD and FAAR.
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Drawdown Indicators
| MBSD | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -14.36% | -18.03% | +3.67% |
Max Drawdown (1Y)Largest decline over 1 year | -2.17% | -5.68% | +3.51% |
Max Drawdown (3Y)Largest decline over 3 years | -4.68% | -11.54% | +6.86% |
Max Drawdown (5Y)Largest decline over 5 years | -14.10% | -18.03% | +3.93% |
Max Drawdown (10Y)Largest decline over 10 years | -14.36% | -18.03% | +3.67% |
Current DrawdownCurrent decline from peak | -1.11% | -5.43% | +4.32% |
Average DrawdownAverage peak-to-trough decline | -2.81% | -7.82% | +5.01% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.72% | 1.89% | -1.17% |
Volatility
MBSD vs. FAAR - Volatility Comparison
The current volatility for FlexShares Disciplined Duration MBS Index Fund (MBSD) is 0.97%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.47%. This indicates that MBSD 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
| MBSD | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.97% | 2.47% | -1.50% |
Volatility (6M)Calculated over the trailing 6-month period | 2.53% | 9.68% | -7.15% |
Volatility (1Y)Calculated over the trailing 1-year period | 3.50% | 13.37% | -9.87% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 5.16% | 12.95% | -7.79% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 4.27% | 11.53% | -7.26% |
MBSD vs. FAAR - Expense Ratio Comparison
MBSD has a 0.20% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
MBSD vs. FAAR - Dividend Comparison
MBSD's dividend yield for the trailing twelve months is around 4.19%, 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% |
MBSD FlexShares Disciplined Duration MBS Index Fund | 4.19% | 4.23% | 3.91% | 3.39% | 3.03% | 2.41% | 2.78% | 3.42% | 3.22% | 3.30% | 3.02% | 3.46% |
Frequently Asked Questions
MBSD and FAAR have a correlation of -0.22, 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 MBSD (0.97%). In terms of maximum drawdown, MBSD dropped -14.36% vs FAAR's -18.03%.
On 10-year performance, FAAR leads with 4.79% vs 1.37% for MBSD. On fees, MBSD is cheaper at 0.20% per year. On volatility, MBSD has been the lower-risk option at 0.97%. 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 4.79% return vs 1.37%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
MBSD is cheaper with a 0.20% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.57%, compared with 4.19% for MBSD.
MBSD is categorized as Mortgage Backed Securities, while FAAR is Commodities. They also come from different issuers: Northern Trust and First Trust. Their fees differ too: 0.20% for MBSD and 0.95% for FAAR.
FAAR currently has the higher Sharpe Ratio (2.02 vs 1.32), 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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