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First Trust's FAAR ETF uses active long-short commodity strategy but underperforms peers with high volatility.

Analyst Insights
23 May 2026
Seeking Alpha
View Source
Bearish
pluang ai news

The First Trust Alternative Absolute Return Strategy ETF (FAAR) employs an active long-short commodities strategy aiming for positive returns in any market condition. Currently, it holds a +54% net long exposure and dynamically adjusts its commodity futures positions. Despite this flexibility, FAAR has underperformed similar funds over the past five years, showing higher volatility at 11.2% standard deviation and carrying a relatively high expense ratio of 0.97%. Analysts rate it as a 'hold' because it delivers positive returns but lags behind better-managed competitors like COM and SDCI.

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