TMSL vs. FAAR

Last updated Jun 25, 2026

TMSL (T. Rowe Price Small-Mid Cap ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - TMSL is a Mid Cap Blend Equities fund actively managed by T. Rowe Price, while FAAR is a Commodities fund actively managed by First Trust. Both are actively managed. Over the past 3 years, TMSL returned 20.75%/yr vs 10.03%/yr for FAAR. At a 0.02 correlation, their price movements are largely independent. TMSL charges 0.55%/yr vs 0.95%/yr for FAAR.

Performance

TMSL vs. FAAR - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in T. Rowe Price Small-Mid Cap ETF (TMSL) and First Trust Alternative Absolute Return Strategy ETF (FAAR). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, TMSL achieves a 18.97% return, which is significantly higher than FAAR's 17.40% return.

TMSL

• 1D: 0.19%
• 1M: 3.64%
• YTD: 18.97%
• 6M: 16.79%
• 1Y: 31.62%
• 3Y*: 20.75%
• 5Y*: —
• 10Y*: —

FAAR

• 1D: -1.46%
• 1M: -6.59%
• YTD: 17.40%
• 6M: 17.10%
• 1Y: 28.26%
• 3Y*: 10.03%
• 5Y*: 7.50%
• 10Y*: 4.54%

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

TMSL vs. FAAR - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
TMSL T. Rowe Price Small-Mid Cap ETF	18.97%	11.95%	15.81%	11.79%
FAAR First Trust Alternative Absolute Return Strategy ETF	17.40%	8.07%	5.97%	-1.80%

Correlation

The correlation between TMSL and FAAR is -0.04, meaning there is essentially no relationship between their price movements. Each responds to its own set of market drivers, making them strong candidates for combining in a diversified portfolio.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	-0.04
Correlation (3Y) Calculated over the trailing 3-year period	0.02
Correlation (All Time) Calculated using the full available price history since Jun 15, 2023	0.02

Return for Risk

TMSL vs. FAAR — Risk / Return Rank

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

TMSL

TMSL Risk / Return Rank: 63
TMSL Sharpe Ratio Rank: 59
TMSL Sortino Ratio Rank: 61
TMSL Omega Ratio Rank: 57
TMSL Calmar Ratio Rank: 65
TMSL Martin Ratio Rank: 71

FAAR

FAAR Risk / Return Rank: 77
FAAR Sharpe Ratio Rank: 76
FAAR Sortino Ratio Rank: 78
FAAR Omega Ratio Rank: 69
FAAR Calmar Ratio Rank: 79
FAAR Martin Ratio Rank: 82

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.

TMSL vs. FAAR - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for T. Rowe Price Small-Mid Cap ETF (TMSL) 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.

	TMSL	FAAR	Difference
Sharpe ratio: Return per unit of total volatility	1.74	2.15	-0.40
Sortino ratio: Return per unit of downside risk	2.50	3.08	-0.58
Omega ratio: Gain probability vs. loss probability	1.31	1.37	-0.05
Calmar ratio: Return relative to maximum drawdown	2.84	3.71	-0.87
Martin ratio: Return relative to average drawdown	11.53	14.66	-3.14

TMSL vs. FAAR - Sharpe Ratio Comparison

The current TMSL Sharpe Ratio is 1.74, which is comparable to the FAAR Sharpe Ratio of 2.15. The chart below compares the historical Sharpe Ratios of TMSL and FAAR, 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

TMSL vs. FAAR - Drawdown Comparison

The maximum TMSL drawdown since its inception was -24.39%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for TMSL and FAAR.

Drawdown Indicators

	TMSL	FAAR	Difference
Max Drawdown Largest peak-to-trough decline	-24.39%	-18.03%	-6.36%
Max Drawdown (1Y) Largest decline over 1 year	-11.19%	-7.66%	-3.53%
Max Drawdown (3Y) Largest decline over 3 years	-24.39%	-11.54%	-12.85%
Max Drawdown (5Y) Largest decline over 5 years	—	-18.03%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-18.03%	—
Current Drawdown Current decline from peak	-1.86%	-7.66%	+5.80%
Average Drawdown Average peak-to-trough decline	-3.89%	-7.82%	+3.93%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.75%	1.93%	+0.82%

Volatility

TMSL vs. FAAR - Volatility Comparison

T. Rowe Price Small-Mid Cap ETF (TMSL) has a higher volatility of 7.03% compared to First Trust Alternative Absolute Return Strategy ETF (FAAR) at 2.82%. This indicates that TMSL's price experiences larger fluctuations and is considered to be riskier than FAAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	TMSL	FAAR	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.03%	2.82%	+4.21%
Volatility (6M) Calculated over the trailing 6-month period	14.81%	9.80%	+5.01%
Volatility (1Y) Calculated over the trailing 1-year period	18.23%	13.30%	+4.93%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.59%	12.97%	+5.62%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.59%	11.55%	+7.04%

TMSL vs. FAAR - Expense Ratio Comparison

TMSL has a 0.55% expense ratio, which is lower than FAAR's 0.95% expense ratio.

Dividends

TMSL vs. FAAR - Dividend Comparison

TMSL's dividend yield for the trailing twelve months is around 0.48%, less than FAAR's 9.80% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017
FAAR First Trust Alternative Absolute Return Strategy ETF	9.80%	11.63%	3.45%	3.20%	5.82%	6.49%	3.05%	1.02%	0.58%	2.83%
TMSL T. Rowe Price Small-Mid Cap ETF	0.48%	0.57%	0.44%	0.34%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both TMSL and FAAR in my portfolio?

TMSL and FAAR have a correlation of -0.04, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, TMSL or FAAR?

TMSL has higher volatility (7.03%) compared to FAAR (2.82%). In terms of maximum drawdown, TMSL dropped -24.39% vs FAAR's -18.03%.

Which ETF is better, TMSL or FAAR?

On 3-year performance, TMSL leads with 20.75% vs 10.03% for FAAR. On fees, TMSL is cheaper at 0.55% per year. On volatility, FAAR has been the lower-risk option at 2.82%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, TMSL or FAAR?

Over the 3-year period, TMSL has performed better with a 20.75% return vs 10.03%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, TMSL or FAAR?

TMSL is cheaper with a 0.55% expense ratio, compared with 0.95% for FAAR.

Which ETF pays a higher dividend yield, TMSL or FAAR?

FAAR has the higher dividend yield at 9.80%, compared with 0.48% for TMSL.

What is the main difference between TMSL and FAAR?

TMSL is categorized as Mid Cap Blend Equities, while FAAR is Commodities. They also come from different issuers: T. Rowe Price and First Trust. Their fees differ too: 0.55% for TMSL and 0.95% for FAAR.

Which has better risk-adjusted returns?

FAAR currently has the higher Sharpe Ratio (2.15 vs 1.74), 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.