PZA vs. FAAR
PZA (Invesco National AMT-Free Municipal Bond ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - PZA is a Municipal Bonds fund tracking the BofA ML National Long-Term Core Plus Municipal Securities Index, while FAAR is a Commodities fund actively managed by First Trust. PZA is passively managed, while FAAR is actively managed. Over the past 10 years, PZA returned 1.76%/yr vs 4.79%/yr for FAAR. At a correlation of -0.02, they often move in opposite directions. PZA charges 0.28%/yr vs 0.95%/yr for FAAR.
Performance
PZA vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, PZA achieves a 2.60% return, which is significantly lower than FAAR's 20.23% return. Over the past 10 years, PZA has underperformed FAAR with an annualized return of 1.76%, while FAAR has yielded a comparatively higher 4.79% annualized return.
PZA
- 1D
- -0.26%
- 1M
- 2.05%
- YTD
- 2.60%
- 6M
- 2.78%
- 1Y
- 8.69%
- 3Y*
- 3.07%
- 5Y*
- 0.03%
- 10Y*
- 1.76%
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%
PZA vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
PZA Invesco National AMT-Free Municipal Bond ETF | 2.60% | 1.81% | 0.81% | 8.64% | -13.17% | 2.37% | 5.07% | 9.00% | -0.09% | 6.95% |
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 PZA and FAAR is -0.14, 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 | -0.14 |
Correlation (3Y) Calculated over the trailing 3-year period | -0.02 |
Correlation (5Y) Calculated over the trailing 5-year period | -0.03 |
Correlation (10Y) Calculated over the trailing 10-year period | -0.02 |
Correlation (All Time) Calculated using the full available price history since May 23, 2016 | -0.02 |
The correlation between PZA and FAAR shifts across timeframes, from -0.14 (1 year) to -0.02 (all time), reflecting how their relationship changes across market environments.
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Return for Risk
PZA vs. FAAR — Risk / Return Rank
PZA
FAAR
PZA vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Invesco National AMT-Free Municipal Bond ETF (PZA) 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.
| PZA | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.07 | ||
| Sortino ratioReturn per unit of downside risk | +0.17 | ||
| Omega ratioGain probability vs. loss probability | 1.45 | 1.35 | +0.11 |
| Calmar ratioReturn relative to maximum drawdown | 2.75 | 4.75 | -2.00 |
| Martin ratioReturn relative to average drawdown | 9.71 | 14.70 | -4.99 |
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Drawdowns
PZA vs. FAAR - Drawdown Comparison
The maximum PZA drawdown since its inception was -24.49%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for PZA and FAAR.
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Drawdown Indicators
| PZA | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.49% | -18.03% | -6.46% |
Max Drawdown (1Y)Largest decline over 1 year | -3.18% | -5.68% | +2.50% |
Max Drawdown (3Y)Largest decline over 3 years | -7.89% | -11.54% | +3.65% |
Max Drawdown (5Y)Largest decline over 5 years | -18.55% | -18.03% | -0.52% |
Max Drawdown (10Y)Largest decline over 10 years | -21.69% | -18.03% | -3.66% |
Current DrawdownCurrent decline from peak | -0.98% | -5.43% | +4.45% |
Average DrawdownAverage peak-to-trough decline | -3.94% | -7.82% | +3.88% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.90% | 1.89% | -0.99% |
Volatility
PZA vs. FAAR - Volatility Comparison
The current volatility for Invesco National AMT-Free Municipal Bond ETF (PZA) is 1.08%, while First Trust Alternative Absolute Return Strategy ETF (FAAR) has a volatility of 2.47%. This indicates that PZA 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
| PZA | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.08% | 2.47% | -1.39% |
Volatility (6M)Calculated over the trailing 6-month period | 2.95% | 9.68% | -6.73% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.17% | 13.37% | -9.20% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.00% | 12.95% | -6.95% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 7.09% | 11.53% | -4.44% |
PZA vs. FAAR - Expense Ratio Comparison
PZA has a 0.28% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
PZA vs. FAAR - Dividend Comparison
PZA's dividend yield for the trailing twelve months is around 3.63%, 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% |
PZA Invesco National AMT-Free Municipal Bond ETF | 3.63% | 3.55% | 3.22% | 2.91% | 2.68% | 2.34% | 2.44% | 2.81% | 3.19% | 3.04% | 3.23% | 3.59% |
Frequently Asked Questions
PZA and FAAR have a correlation of -0.14, 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 PZA (1.08%). In terms of maximum drawdown, PZA dropped -24.49% vs FAAR's -18.03%.
On 10-year performance, FAAR leads with 4.79% vs 1.76% for PZA. On fees, PZA is cheaper at 0.28% per year. On volatility, PZA has been the lower-risk option at 1.08%. 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 1.76%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
PZA is cheaper with a 0.28% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.57%, compared with 3.63% for PZA.
PZA is categorized as Municipal Bonds, while FAAR is Commodities. They also come from different issuers: Invesco and First Trust. Their fees differ too: 0.28% for PZA and 0.95% for FAAR.
PZA currently has the higher Sharpe Ratio (2.10 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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