XLF vs. FAAR
XLF (State Street Financial Select Sector SPDR ETF) and FAAR (First Trust Alternative Absolute Return Strategy ETF) are both exchange-traded funds - XLF is a Financials Equities fund tracking the Financial Select Sector Index, while FAAR is a Commodities fund actively managed by First Trust. XLF is passively managed, while FAAR is actively managed. Over the past 10 years, XLF returned 13.72%/yr vs 4.69%/yr for FAAR. At a 0.05 correlation, their price movements are largely independent. XLF charges 0.08%/yr vs 0.95%/yr for FAAR.
Performance
XLF vs. FAAR - Performance Comparison
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Returns By Period
In the year-to-date period, XLF achieves a -0.77% return, which is significantly lower than FAAR's 19.14% return. Over the past 10 years, XLF has outperformed FAAR with an annualized return of 13.72%, while FAAR has yielded a comparatively lower 4.69% annualized return.
XLF
- 1D
- 0.34%
- 1M
- 4.10%
- YTD
- -0.77%
- 6M
- -1.95%
- 1Y
- 7.67%
- 3Y*
- 19.94%
- 5Y*
- 10.00%
- 10Y*
- 13.72%
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%
XLF vs. FAAR - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
XLF State Street Financial Select Sector SPDR ETF | -0.77% | 14.90% | 30.56% | 12.03% | -10.59% | 34.80% | -1.74% | 31.88% | -13.06% | 22.00% |
FAAR First Trust Alternative Absolute Return Strategy ETF | 19.14% | 8.07% | 5.97% | -5.63% | 10.15% | 12.34% | 8.60% | -1.28% | -9.17% | 5.00% |
Correlation
The correlation between XLF 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 | -0.04 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.02 |
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 | 0.05 |
The correlation between XLF and FAAR shifts across timeframes, from -0.14 (1 year) to 0.05 (10 years), reflecting how their relationship changes across market environments.
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Return for Risk
XLF vs. FAAR — Risk / Return Rank
XLF
FAAR
XLF vs. FAAR - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for State Street Financial Select Sector SPDR ETF (XLF) 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.
| XLF | FAAR | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -1.63 | ||
| Sortino ratioReturn per unit of downside risk | -2.29 | ||
| Omega ratioGain probability vs. loss probability | 1.10 | 1.37 | -0.27 |
| Calmar ratioReturn relative to maximum drawdown | 0.52 | 4.52 | -4.00 |
| Martin ratioReturn relative to average drawdown | 1.33 | 15.18 | -13.85 |
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Drawdowns
XLF vs. FAAR - Drawdown Comparison
The maximum XLF drawdown since its inception was -82.69%, which is greater than FAAR's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for XLF and FAAR.
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Drawdown Indicators
| XLF | FAAR | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -82.69% | -18.03% | -64.66% |
Max Drawdown (1Y)Largest decline over 1 year | -14.79% | -6.29% | -8.50% |
Max Drawdown (3Y)Largest decline over 3 years | -15.54% | -11.54% | -4.00% |
Max Drawdown (5Y)Largest decline over 5 years | -25.81% | -18.03% | -7.78% |
Max Drawdown (10Y)Largest decline over 10 years | -42.86% | -18.03% | -24.83% |
Current DrawdownCurrent decline from peak | -3.64% | -6.29% | +2.65% |
Average DrawdownAverage peak-to-trough decline | -19.99% | -7.82% | -12.17% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 5.79% | 1.87% | +3.92% |
Volatility
XLF vs. FAAR - Volatility Comparison
State Street Financial Select Sector SPDR ETF (XLF) has a higher volatility of 4.12% compared to First Trust Alternative Absolute Return Strategy ETF (FAAR) at 2.55%. This indicates that XLF'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
| XLF | FAAR | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 4.12% | 2.55% | +1.57% |
Volatility (6M)Calculated over the trailing 6-month period | 11.27% | 9.68% | +1.59% |
Volatility (1Y)Calculated over the trailing 1-year period | 14.62% | 13.38% | +1.24% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 18.58% | 12.96% | +5.62% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 22.11% | 11.54% | +10.57% |
XLF vs. FAAR - Expense Ratio Comparison
XLF has a 0.08% expense ratio, which is lower than FAAR's 0.95% expense ratio.
Dividends
XLF vs. FAAR - Dividend Comparison
XLF's dividend yield for the trailing twelve months is around 1.50%, less than FAAR's 9.66% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
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% | 0.00% | 0.00% |
XLF State Street Financial Select Sector SPDR ETF | 1.50% | 1.31% | 1.42% | 1.71% | 2.04% | 1.63% | 2.03% | 1.87% | 2.08% | 1.48% | 21.10% | 1.95% |
Frequently Asked Questions
XLF 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.
XLF has higher volatility (4.12%) compared to FAAR (2.55%). In terms of maximum drawdown, XLF dropped -82.69% vs FAAR's -18.03%.
On 10-year performance, XLF leads with 13.72% vs 4.69% for FAAR. On fees, XLF is cheaper at 0.08% per year. 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 10-year period, XLF has performed better with a 13.72% return vs 4.69%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
XLF is cheaper with a 0.08% expense ratio, compared with 0.95% for FAAR.
FAAR has the higher dividend yield at 9.66%, compared with 1.50% for XLF.
XLF is categorized as Financials Equities, while FAAR is Commodities. They also come from different issuers: State Street and First Trust. Their fees differ too: 0.08% for XLF and 0.95% for FAAR.
FAAR currently has the higher Sharpe Ratio (2.15 vs 0.53), 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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