FOWF vs. NATO

Last updated Jun 24, 2026

FOWF (Pacer Solactive Whitney Future of Warfare ETF) and NATO (Themes Transatlantic Defense ETF) are both exchange-traded funds - FOWF is a Industrials Equities fund tracking the Solactive Whitney Future of Warfare Index, while NATO is a Aerospace & Defense fund tracking the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, FOWF returned 18.49% vs 17.37% for NATO. Their correlation of 0.83 suggests significant overlap in exposure. FOWF charges 0.49%/yr vs 0.35%/yr for NATO.

Performance

FOWF vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Pacer Solactive Whitney Future of Warfare ETF (FOWF) 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, FOWF achieves a 7.20% return, which is significantly higher than NATO's 4.58% return.

FOWF

• 1D: -0.07%
• 1M: -1.24%
• YTD: 7.20%
• 6M: 6.17%
• 1Y: 18.49%
• 3Y*: —
• 5Y*: —
• 10Y*: —

NATO

• 1D: -0.10%
• 1M: 1.72%
• YTD: 4.58%
• 6M: 4.25%
• 1Y: 17.37%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

FOWF vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
FOWF Pacer Solactive Whitney Future of Warfare ETF	7.20%	29.15%	-2.02%
NATO Themes Transatlantic Defense ETF	4.58%	50.95%	-1.94%

Correlation

The correlation between FOWF and NATO is 0.84, 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	0.84
Correlation (All Time) Calculated using the full available price history since Dec 18, 2024	0.83

The correlation between FOWF and NATO has been stable across timeframes, ranging from 0.83 to 0.84 - a consistent structural relationship.

Return for Risk

FOWF vs. NATO — Risk / Return Rank

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

FOWF

FOWF Risk / Return Rank: 39
FOWF Sharpe Ratio Rank: 39
FOWF Sortino Ratio Rank: 42
FOWF Omega Ratio Rank: 36
FOWF Calmar Ratio Rank: 40
FOWF Martin Ratio Rank: 39

NATO

NATO Risk / Return Rank: 23
NATO Sharpe Ratio Rank: 24
NATO Sortino Ratio Rank: 25
NATO Omega Ratio Rank: 23
NATO Calmar Ratio Rank: 24
NATO Martin Ratio Rank: 22

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.

FOWF vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Pacer Solactive Whitney Future of Warfare ETF (FOWF) 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.

	FOWF	NATO	Difference
Sharpe ratio: Return per unit of total volatility	1.29	0.81	+0.47
Sortino ratio: Return per unit of downside risk	1.97	1.31	+0.66
Omega ratio: Gain probability vs. loss probability	1.23	1.15	+0.07
Calmar ratio: Return relative to maximum drawdown	1.84	1.09	+0.75
Martin ratio: Return relative to average drawdown	5.71	2.65	+3.06

FOWF vs. NATO - Sharpe Ratio Comparison

The current FOWF Sharpe Ratio is 1.29, which is higher than the NATO Sharpe Ratio of 0.81. The chart below compares the historical Sharpe Ratios of FOWF 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

FOWF vs. NATO - Drawdown Comparison

The maximum FOWF drawdown since its inception was -12.29%, smaller than the maximum NATO drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for FOWF and NATO.

Drawdown Indicators

	FOWF	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-12.29%	-15.99%	+3.70%
Max Drawdown (1Y) Largest decline over 1 year	-10.08%	-15.99%	+5.91%
Current Drawdown Current decline from peak	-4.80%	-9.55%	+4.75%
Average Drawdown Average peak-to-trough decline	-2.12%	-3.89%	+1.77%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.25%	6.57%	-3.32%

Volatility

FOWF vs. NATO - Volatility Comparison

The current volatility for Pacer Solactive Whitney Future of Warfare ETF (FOWF) is 5.41%, while Themes Transatlantic Defense ETF (NATO) has a volatility of 7.57%. This indicates that FOWF experiences smaller price fluctuations and is considered to be less risky than NATO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FOWF	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.41%	7.57%	-2.16%
Volatility (6M) Calculated over the trailing 6-month period	12.07%	18.35%	-6.28%
Volatility (1Y) Calculated over the trailing 1-year period	14.45%	21.46%	-7.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.03%	22.72%	-5.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.03%	22.72%	-5.69%

FOWF vs. NATO - Expense Ratio Comparison

FOWF has a 0.49% expense ratio, which is higher than NATO's 0.35% expense ratio.

Dividends

FOWF vs. NATO - Dividend Comparison

FOWF's dividend yield for the trailing twelve months is around 0.77%, more than NATO's 0.43% yield.

Position	TTM	2025	2024
FOWF Pacer Solactive Whitney Future of Warfare ETF	0.77%	0.79%	0.00%
NATO Themes Transatlantic Defense ETF	0.43%	0.45%	0.08%

Frequently Asked Questions

Can I hold both FOWF and NATO in my portfolio?

FOWF and NATO have a correlation of 0.84, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FOWF or NATO?

NATO has higher volatility (7.57%) compared to FOWF (5.41%). In terms of maximum drawdown, FOWF dropped -12.29% vs NATO's -15.99%.

Which ETF is better, FOWF or NATO?

On 1-year performance, FOWF leads with 18.49% vs 17.37% for NATO. On fees, NATO is cheaper at 0.35% per year. On volatility, FOWF has been the lower-risk option at 5.41%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FOWF or NATO?

Over the 1-year period, FOWF has performed better with a 18.49% return vs 17.37%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FOWF or NATO?

NATO is cheaper with a 0.35% expense ratio, compared with 0.49% for FOWF.

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

FOWF has the higher dividend yield at 0.77%, compared with 0.43% for NATO.

What is the main difference between FOWF and NATO?

FOWF is categorized as Industrials Equities, while NATO is Aerospace & Defense. FOWF tracks Solactive Whitney Future of Warfare Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. They also come from different issuers: Pacer and Themes. Their fees differ too: 0.49% for FOWF and 0.35% for NATO.

Which has better risk-adjusted returns?

FOWF currently has the higher Sharpe Ratio (1.29 vs 0.81), 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.