EUAD vs. NATO

Last updated Jul 14, 2026

EUAD (Select STOXX Europe Aerospace & Defense ETF) and NATO (Themes Transatlantic Defense ETF) are both Aerospace & Defense funds - EUAD tracks the STOXX Europe Total Market Aerospace & Defense Index while NATO tracks the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, EUAD returned -3.16% vs 10.95% for NATO. A 0.74 correlation means they provide meaningful diversification when combined. EUAD charges 0.50%/yr vs 0.35%/yr for NATO.

Performance

EUAD vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Select STOXX Europe Aerospace & Defense ETF (EUAD) and Themes Transatlantic Defense ETF (NATO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, EUAD achieves a -1.21% return, which is significantly lower than NATO's 4.20% return.

EUAD

• 1D: -2.00%
• 1M: 1.19%
• 6M: -13.49%
• YTD: -1.21%
• 1Y: -3.16%
• 3Y*: —
• 5Y*: —
• 10Y*: —

NATO

• 1D: -1.91%
• 1M: 0.11%
• 6M: -6.12%
• YTD: 4.20%
• 1Y: 10.95%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

EUAD vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
EUAD Select STOXX Europe Aerospace & Defense ETF	-1.21%	74.51%	-6.86%
NATO Themes Transatlantic Defense ETF	4.20%	50.95%	-2.14%

Correlation

The correlation between EUAD and NATO is 0.80, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.80
Correlation (All Time) Calculated using the full available price history since Oct 22, 2024	0.74

The correlation between EUAD and NATO has been stable across timeframes, ranging from 0.74 to 0.80 - a consistent structural relationship.

Return for Risk

EUAD vs. NATO — Risk / Return Rank

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

EUAD

EUAD Risk / Return Rank: 8
EUAD Sharpe Ratio Rank: 8
EUAD Sortino Ratio Rank: 8
EUAD Omega Ratio Rank: 8
EUAD Calmar Ratio Rank: 8
EUAD Martin Ratio Rank: 8

NATO

NATO Risk / Return Rank: 19
NATO Sharpe Ratio Rank: 19
NATO Sortino Ratio Rank: 19
NATO Omega Ratio Rank: 18
NATO Calmar Ratio Rank: 20
NATO Martin Ratio Rank: 19

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.

EUAD vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Select STOXX Europe Aerospace & Defense ETF (EUAD) and Themes Transatlantic Defense ETF (NATO). 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.

	EUAD	NATO	Difference
Sharpe ratio: Return per unit of total volatility	-0.11	0.51	-0.61
Sortino ratio: Return per unit of downside risk	0.05	0.89	-0.83
Omega ratio: Gain probability vs. loss probability	1.01	1.10	-0.10
Calmar ratio: Return relative to maximum drawdown	-0.14	0.69	-0.83
Martin ratio: Return relative to average drawdown	-0.32	1.61	-1.92

EUAD vs. NATO - Sharpe Ratio Comparison

The current EUAD Sharpe Ratio is -0.11, which is lower than the NATO Sharpe Ratio of 0.51. The chart below compares the historical Sharpe Ratios of EUAD and NATO, 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

EUAD vs. NATO - Drawdown Comparison

The maximum EUAD drawdown since its inception was -22.04%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for EUAD and NATO.

Drawdown Indicators

	EUAD	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-22.04%	-15.99%	-6.05%
Max Drawdown (1Y) Largest decline over 1 year	-22.04%	-15.99%	-6.05%
Current Drawdown Current decline from peak	-13.79%	-9.88%	-3.91%
Average Drawdown Average peak-to-trough decline	-6.16%	-4.02%	-2.14%
Ulcer Index Depth and duration of drawdowns from previous peaks	9.94%	6.83%	+3.11%

Volatility

EUAD vs. NATO - Volatility Comparison

Select STOXX Europe Aerospace & Defense ETF (EUAD) has a higher volatility of 8.24% compared to Themes Transatlantic Defense ETF (NATO) at 7.48%. This indicates that EUAD's price experiences larger fluctuations and is considered to be riskier than NATO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	EUAD	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	8.24%	7.48%	+0.76%
Volatility (6M) Calculated over the trailing 6-month period	24.42%	18.46%	+5.96%
Volatility (1Y) Calculated over the trailing 1-year period	29.38%	21.81%	+7.57%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	29.74%	22.74%	+7.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	29.74%	22.74%	+7.00%

EUAD vs. NATO - Expense Ratio Comparison

EUAD has a 0.50% expense ratio, which is higher than NATO's 0.35% expense ratio.

Dividends

EUAD vs. NATO - Dividend Comparison

EUAD's dividend yield for the trailing twelve months is around 0.41%, less than NATO's 0.43% yield.

Position	TTM	2025	2024
EUAD Select STOXX Europe Aerospace & Defense ETF	0.41%	0.40%	0.10%
NATO Themes Transatlantic Defense ETF	0.43%	0.45%	0.08%

Frequently Asked Questions

Can I hold both EUAD and NATO in my portfolio?

EUAD and NATO have a correlation of 0.80, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, EUAD or NATO?

EUAD has higher volatility (8.24%) compared to NATO (7.48%). In terms of maximum drawdown, EUAD dropped -22.04% vs NATO's -15.99%.

Which ETF is better, EUAD or NATO?

On 1-year performance, NATO leads with 10.95% vs -3.16% for EUAD. On fees, NATO is cheaper at 0.35% per year. On volatility, NATO has been the lower-risk option at 7.48%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, EUAD or NATO?

Over the 1-year period, NATO has performed better with a 10.95% return vs -3.16%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, EUAD or NATO?

NATO is cheaper with a 0.35% expense ratio, compared with 0.50% for EUAD.

Which ETF pays a higher dividend yield, EUAD or NATO?

NATO has the higher dividend yield at 0.43%, compared with 0.41% for EUAD.

What is the main difference between EUAD and NATO?

EUAD tracks STOXX Europe Total Market Aerospace & Defense Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. They also come from different issuers: Select Funds and Themes. Their fees differ too: 0.50% for EUAD and 0.35% for NATO.

Which has better risk-adjusted returns?

NATO currently has the higher Sharpe Ratio (0.51 vs -0.11), 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.