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ETFs

First Trust Exchange-Traded Fund VII First Trust Alternative Absolute Return Strategy ETF

FAAR
$—
Today’s Change
— (—)

Snapshot
*

Inception Date
May 18, 2016
Expense Ratio
0.95%
Type
Global Commodities & Metals
Fund Owner
First Trust
Volume (1m avg. daily)
$586,712
AUM
$174,480,058
Associated Index
None
Inverse/Leveraged
No
Passive/Active
Active
Fractionable on Composer
Yes
Prospectus
View

Top 10 Holdings

—
US Dollar
47.24%
—
U.S. Treasury Bill 0% due 10/12/2023
6.78%
—
U.S. Treasury Bill 0% due 11/09/2023
6.75%
—
U.S. Treasury Bill 0% due 11/16/2023
6.74%
—
U.S. Treasury Bill 0% due 12/14/2023
6.71%
—
U.S. Treasury Note 0.25% due 06/15/2024
6.54%
—
U.S. Treasury Note 0.375% due 09/15/2024
6.47%
—
U.S. Treasury Note 1% due 12/15/2024
6.44%
—
U.S. Treasury Note 0.50% due 03/31/2025
6.33%
—
Derivatives offset
-68.45%
Invest with FAAR
Trade FAAR Options

What is FAAR?

The First Trust Alternative Absolute Return Strategy ETF is an actively managed exchange-traded fund that seeks to provide investors with long-term total return. The Fund is an actively managed exchange-traded fund that seeks to achieve long-term total return through long and short invest-ments in exchange-traded commodity futures contracts ( Commodity Futures ) through a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the Subsidiary ). The Fund will not invest directly in Commodity Futures. The Fund expects to gain exposure to these investments exclusively by investing in the Subsidiary. The Subsidiary is advised by First Trust Advisors L.P., the Fund s investment advisor. The Fund s investment in the Subsidiary is intended to provide the Fund with exposure to commodity markets within the limits of current federal income tax laws applicable to investment companies such as the Fund, which limit the ability of investment companies to invest directly in Commodity Futures. The Subsidiary has the same investment objective as the Fund, but unlike the Fund, it may invest without limitation in Commodity Futures. Except as otherwise noted, for purposes of this prospectus, refer-ences to the Fund s investments include the Fund s indirect investments through the Subsidiary. The Fund will invest up to 25% of its total assets in the Subsidiary.

1M
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YTD
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Max
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FAAR
Performance Measures**

for the time period May 23, 2016 to Dec 4, 2025

Returns

1M Trailing Return: 1.8%

The percent change in the value over the most recent 1-month period.

3M Trailing Return: 2.4%

The percent change in the value over the most recent 3-month period.

Measures of Risk or Volatility

Max Drawdown: -18.0%

The greatest percent loss from peak to trough in value over the time period.

Standard Deviation: 11.4%

The typical amount that daily returns vary from the mean of the returns over the time period, standardized to a period of a year.

Measures of Risk-Adjusted Performance

Sharpe Ratio: 0.33

The annualized arithmetic mean of the daily returns divided by the annualized standard deviation of the daily returns for the selected time period.

Calmar Ratio: 0.18

The annualized return divided by the max drawdown for the selected time period.

ETFs related toFAAR

ETFs correlated to FAAR include TSLR, XAUG, GAUG

FAAR
First Trust Exchange-Traded Fund III - First Trust Alternative Absolute Return Strategy ETF
TSLR
GraniteShares ETF Trust - GraniteShares 1.75x Long TSLA Daily ETF
XAUG
First Trust Exchange-Traded Fund VIII - FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - August
GAUG
First Trust Exchange-Traded Fund VIII - FT Cboe Vest U.S. Equity Moderate Buffer ETF - August
AUGW
AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer20 Aug ETF

What is ETF correlation?

Correlation is a measure of the strength of the relationship between two ETFs. It quantifies the degree to which prices of the two ETFs typically move together.

Here, correlation is measured over the past year with the Pearson correlation coefficient (Pearon’s r), which ranges from -1 to 1.

Using ETF correlations in portfolio and strategy construction

ETF correlations can help you create investing strategies and portfolios. Use them to:

  • •Build a diversified portfolio from uncorrelated or inversely correlated ETFs with the aim of minimizing portfolio risk.
  • •Compare correlated or related ETFs to find one with a lower expense ratio or higher trading volume.
  • •Create an investing strategy that hedges an ETF with an uncorrelated or inversely correlated ETF.

Trading Strategies
Related toFAAR

C-DTMS (Longer Backtest Mod) - 24May2019

Category

Multi-asset, sector rotation, trend + mean reversion, volatility filter, leveraged ETFs, bonds, commodities, hedged equity

OOS Cumulative Return

187%

Michael B Meets Dalio w/ Pop Bots 2.1.0

Category

Multi-asset, trend-following, momentum, risk-managed, sector rotation, commodities, bonds, leveraged ETFs, volatility hedge

OOS Cumulative Return

123.99%

Create your own algorithmic trading strategy with FAAR using Composer

FAQ

FAAR is a Global Commodities & Metals ETF. The First Trust Alternative Absolute Return Strategy ETF is an actively managed exchange-traded fund that seeks to provide investors with long-term total return. The Fund is an actively managed exchange-traded fund that seeks to achieve long-term total return through long and short invest-ments in exchange-traded commodity futures contracts ( Commodity Futures ) through a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the Subsidiary ). The Fund will not invest directly in Commodity Futures. The Fund expects to gain exposure to these investments exclusively by investing in the Subsidiary. The Subsidiary is advised by First Trust Advisors L.P., the Fund s investment advisor. The Fund s investment in the Subsidiary is intended to provide the Fund with exposure to commodity markets within the limits of current federal income tax laws applicable to investment companies such as the Fund, which limit the ability of investment companies to invest directly in Commodity Futures. The Subsidiary has the same investment objective as the Fund, but unlike the Fund, it may invest without limitation in Commodity Futures. Except as otherwise noted, for purposes of this prospectus, refer-ences to the Fund s investments include the Fund s indirect investments through the Subsidiary. The Fund will invest up to 25% of its total assets in the Subsidiary.

Yes, FAAR is actively managed. In an actively managed fund, the fund manager makes decisions about how funds are invested. A passively managed fund typically tries to track or follow a market index.

No, FAAR is not passively managed. It is actively managed. A passively managed fund typically tries to track or follow a market index. In an actively managed fund, the fund manager makes decisions about how funds are invested.

The 1-month return on FAAR is 0.0112%. This is the percent change in the value of FAAR over the most recent 1-month period. The 3-month return on FAAR is 0.0354%. This is the percent change in the value of FAAR over the most recent 3-month period.

The standard deviation of FAAR for the past year is 0.0971%. Standard deviation is the typical amount that the daily returns vary from the mean of the returns over the time period, standardized to a period of a year.

ETFs similar to FAAR include FTGC, PDBC, and DBC.

ETFs correlated to FAAR include TSLR, XAUG, and GAUG.

ETFs that are inversely correlated to FAAR include MLN, SCO, and NRGD.

Disclaimers

*

We show information directly obtained from our data provider, Xignite. Data shown here is provided by Xignite, an unaffiliated third party. Composer believes the information shown here is reliable, but has not been verified and there is no guarantee that the information is accurate.

**

We show information based on calculations performed by Composer using data from our provider. Information provided here is based on calculations performed by Composer using data sourced from Xignite, an unaffiliated third party. Composer believes this information is reliable, but has not verified the data and there is no guarantee that the calculations are accurate.