MSFD vs. FAI

Last updated Jun 24, 2026

MSFD (Direxion Daily MSFT Bear 1X Shares) and FAI (First Trust Bloomberg Artificial Intelligence ETF) are both exchange-traded funds - MSFD is a Inverse Equities fund tracking the Microsoft Corporation (-100%), while FAI is a Technology Equities fund tracking the Bloomberg Artificial Intelligence Index. Both are passively managed. Over the past year, MSFD returned 26.45% vs 56.66% for FAI. At a correlation of -0.60, they often move in opposite directions. MSFD charges 1.06%/yr vs 0.65%/yr for FAI.

Performance

MSFD vs. FAI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Direxion Daily MSFT Bear 1X Shares (MSFD) and First Trust Bloomberg Artificial Intelligence ETF (FAI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, MSFD achieves a 24.19% return, which is significantly lower than FAI's 27.58% return.

MSFD

• 1D: -3.08%
• 1M: 9.58%
• YTD: 24.19%
• 6M: 25.23%
• 1Y: 26.45%
• 3Y*: -3.55%
• 5Y*: —
• 10Y*: —

FAI

• 1D: -4.82%
• 1M: 1.99%
• YTD: 27.58%
• 6M: 26.62%
• 1Y: 56.66%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

MSFD vs. FAI - Yearly Performance Comparison

	2026 (YTD)	2025	2024
MSFD Direxion Daily MSFT Bear 1X Shares	24.19%	-13.36%	-1.24%
FAI First Trust Bloomberg Artificial Intelligence ETF	27.58%	33.37%	2.28%

Correlation

The correlation between MSFD and FAI is -0.50, 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	-0.50
Correlation (All Time) Calculated using the full available price history since Nov 21, 2024	-0.60

The correlation between MSFD and FAI shifts across timeframes, from -0.60 (all time) to -0.50 (1 year), reflecting how their relationship changes across market environments.

Return for Risk

MSFD vs. FAI — Risk / Return Rank

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

MSFD

MSFD Risk / Return Rank: 29
MSFD Sharpe Ratio Rank: 30
MSFD Sortino Ratio Rank: 32
MSFD Omega Ratio Rank: 32
MSFD Calmar Ratio Rank: 25
MSFD Martin Ratio Rank: 28

FAI

FAI Risk / Return Rank: 64
FAI Sharpe Ratio Rank: 71
FAI Sortino Ratio Rank: 60
FAI Omega Ratio Rank: 63
FAI Calmar Ratio Rank: 67
FAI Martin Ratio Rank: 58

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.

MSFD vs. FAI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Direxion Daily MSFT Bear 1X Shares (MSFD) and First Trust Bloomberg Artificial Intelligence ETF (FAI). 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.

	MSFD	FAI	Difference
Sharpe ratio: Return per unit of total volatility	1.01	2.08	-1.06
Sortino ratio: Return per unit of downside risk	1.63	2.56	-0.93
Omega ratio: Gain probability vs. loss probability	1.20	1.35	-0.14
Calmar ratio: Return relative to maximum drawdown	1.14	3.02	-1.88
Martin ratio: Return relative to average drawdown	3.69	9.38	-5.69

MSFD vs. FAI - Sharpe Ratio Comparison

The current MSFD Sharpe Ratio is 1.01, which is lower than the FAI Sharpe Ratio of 2.08. The chart below compares the historical Sharpe Ratios of MSFD and FAI, 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

MSFD vs. FAI - Drawdown Comparison

The maximum MSFD drawdown since its inception was -59.90%, which is greater than FAI's maximum drawdown of -27.82%. Use the drawdown chart below to compare losses from any high point for MSFD and FAI.

Drawdown Indicators

	MSFD	FAI	Difference
Max Drawdown Largest peak-to-trough decline	-59.90%	-27.82%	-32.08%
Max Drawdown (1Y) Largest decline over 1 year	-23.25%	-18.84%	-4.41%
Max Drawdown (3Y) Largest decline over 3 years	-40.50%	—	—
Current Drawdown Current decline from peak	-43.99%	-9.38%	-34.61%
Average Drawdown Average peak-to-trough decline	-41.61%	-5.37%	-36.24%
Ulcer Index Depth and duration of drawdowns from previous peaks	7.35%	6.06%	+1.29%

Volatility

MSFD vs. FAI - Volatility Comparison

The current volatility for Direxion Daily MSFT Bear 1X Shares (MSFD) is 11.74%, while First Trust Bloomberg Artificial Intelligence ETF (FAI) has a volatility of 14.67%. This indicates that MSFD experiences smaller price fluctuations and is considered to be less risky than FAI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSFD	FAI	Difference
Volatility (1M) Calculated over the trailing 1-month period	11.74%	14.67%	-2.93%
Volatility (6M) Calculated over the trailing 6-month period	22.81%	22.72%	+0.09%
Volatility (1Y) Calculated over the trailing 1-year period	26.33%	27.43%	-1.10%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	26.27%	31.12%	-4.85%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	26.27%	31.12%	-4.85%

MSFD vs. FAI - Expense Ratio Comparison

MSFD has a 1.06% expense ratio, which is higher than FAI's 0.65% expense ratio.

Dividends

MSFD vs. FAI - Dividend Comparison

MSFD's dividend yield for the trailing twelve months is around 2.52%, while FAI has not paid dividends to shareholders.

Position	TTM	2025	2024	2023	2022
FAI First Trust Bloomberg Artificial Intelligence ETF	0.00%	0.00%	0.04%	0.00%	0.00%
MSFD Direxion Daily MSFT Bear 1X Shares	2.52%	3.33%	4.46%	4.43%	0.74%

Frequently Asked Questions

Can I hold both MSFD and FAI in my portfolio?

MSFD and FAI have a correlation of -0.50, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, MSFD or FAI?

FAI has higher volatility (14.67%) compared to MSFD (11.74%). In terms of maximum drawdown, MSFD dropped -59.90% vs FAI's -27.82%.

Which ETF is better, MSFD or FAI?

On 1-year performance, FAI leads with 56.66% vs 26.45% for MSFD. On fees, FAI is cheaper at 0.65% per year. On volatility, MSFD has been the lower-risk option at 11.74%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, MSFD or FAI?

Over the 1-year period, FAI has performed better with a 56.66% return vs 26.45%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, MSFD or FAI?

FAI is cheaper with a 0.65% expense ratio, compared with 1.06% for MSFD.

Which ETF pays a higher dividend yield, MSFD or FAI?

MSFD has the higher dividend yield at 2.52%, compared with 0.00% for FAI.

What is the main difference between MSFD and FAI?

MSFD is categorized as Inverse Equities, while FAI is Technology Equities. MSFD tracks Microsoft Corporation (-100%), while FAI tracks Bloomberg Artificial Intelligence Index. They also come from different issuers: Direxion and First Trust. Their fees differ too: 1.06% for MSFD and 0.65% for FAI.

Which has better risk-adjusted returns?

FAI currently has the higher Sharpe Ratio (2.08 vs 1.01), 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.