USML vs. FAAR
USML (ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - USML is a Leveraged Equities fund tracking the MSCI USA Minimum Volatility Index, while FAAR is a Commodities fund actively managed by First Trust. USML is passively managed, while FAAR is actively managed. Over the past 5 years, USML returned 7.17%/yr vs 7.72%/yr for FAAR. At a 0.01 correlation, their price movements are largely independent. Both charge a 0.95% expense ratio.
Performance
USML vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, USML achieves a -0.53% return, which is significantly lower than FAAR's 19.14% return.
USML
- 1D
- 0.60%
- 1M
- -4.40%
- YTD
- -0.53%
- 6M
- -1.84%
- 1Y
- 1.32%
- 3Y*
- 14.47%
- 5Y*
- 7.17%
- 10Y*
- —
FAAR
- 1D
- -0.91%
- 1M
- -5.21%
- YTD
- 19.14%
- 6M
- 18.06%
- 1Y
- 28.33%
- 3Y*
- 10.57%
- 5Y*
- 7.72%
- 10Y*
- 4.69%
USML vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|---|
USML ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN | -0.53% | 9.33% | 23.97% | 11.37% | -22.87% | 42.12% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 19.14% | 8.07% | 5.97% | -5.63% | 10.15% | 11.36% |
Correlation
The correlation between USML and FAAR is -0.03, 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 | -0.03 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.01 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.00 |
Correlation (All Time) Calculated using the full available price history since Feb 5, 2021 | 0.01 |
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Return for Risk
USML vs. FAAR — Risk / Return Rank
USML
FAAR
USML vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN (USML) 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.
| USML | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -2.07 | ||
| Sortino ratioReturn per unit of downside risk | -2.87 | ||
| Omega ratioGain probability vs. loss probability | 1.03 | 1.37 | -0.34 |
| Calmar ratioReturn relative to maximum drawdown | 0.10 | 4.52 | -4.42 |
| Martin ratioReturn relative to average drawdown | 0.29 | 15.18 | -14.88 |
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Drawdowns
USML vs. FAAR - Drawdown Comparison
The maximum USML drawdown since its inception was -35.34%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for USML and FAAR.
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Drawdown Indicators
| USML | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -35.34% | -18.03% | -17.31% |
Max Drawdown (1Y)Largest decline over 1 year | -13.09% | -6.29% | -6.80% |
Max Drawdown (3Y)Largest decline over 3 years | -19.14% | -11.54% | -7.60% |
Max Drawdown (5Y)Largest decline over 5 years | -35.34% | -18.03% | -17.31% |
Max Drawdown (10Y)Largest decline over 10 years | — | -18.03% | — |
Current DrawdownCurrent decline from peak | -6.96% | -6.29% | -0.67% |
Average DrawdownAverage peak-to-trough decline | -10.36% | -7.82% | -2.54% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 4.50% | 1.87% | +2.63% |
Volatility
USML vs. FAAR - Volatility Comparison
ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN (USML) has a higher volatility of 4.79% compared to First Trust Alternative Absolute Return Strategy ETF (FAAR) at 2.55%. This indicates that USML'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.
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Volatility by Period
| USML | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 4.79% | 2.55% | +2.24% |
Volatility (6M)Calculated over the trailing 6-month period | 11.79% | 9.68% | +2.11% |
Volatility (1Y)Calculated over the trailing 1-year period | 16.52% | 13.38% | +3.14% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 24.47% | 12.96% | +11.51% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 24.22% | 11.54% | +12.68% |
USML vs. FAAR - Expense Ratio Comparison
Both USML and FAAR have an expense ratio of 0.95%.
Dividends
USML vs. FAAR - Dividend Comparison
USML has not paid dividends to shareholders, while FAAR's dividend yield for the trailing twelve months is around 9.66%.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|---|---|---|
FAAR First Trust Alternative Absolute Return Strategy ETF | 9.66% | 11.63% | 3.45% | 3.20% | 5.82% | 6.49% | 3.05% | 1.02% | 0.58% | 2.83% |
USML ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
USML and FAAR have a correlation of -0.03, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
USML has higher volatility (4.79%) compared to FAAR (2.55%). In terms of maximum drawdown, USML dropped -35.34% vs FAAR's -18.03%.
On 5-year performance, FAAR leads with 7.72% vs 7.17% for USML. Both ETFs have the same 0.95% expense ratio. On volatility, FAAR has been the lower-risk option at 2.55%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 5-year period, FAAR has performed better with a 7.72% return vs 7.17%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
USML and FAAR have the same expense ratio: 0.95% per year.
FAAR has the higher dividend yield at 9.66%, compared with 0.00% for USML.
USML is categorized as Leveraged Equities, while FAAR is Commodities. They also come from different issuers: UBS and First Trust.
FAAR currently has the higher Sharpe Ratio (2.15 vs 0.08), 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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