ITA vs. NATO

Last updated Jul 17, 2026

ITA (iShares U.S. Aerospace & Defense ETF) and NATO (Themes Transatlantic Defense ETF) are both Aerospace & Defense funds - ITA tracks the Dow Jones U.S. Select Aerospace & Defense Index while NATO tracks the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, ITA returned 19.36% vs 8.35% for NATO. Their correlation of 0.85 suggests significant overlap in exposure. ITA charges 0.38%/yr vs 0.35%/yr for NATO.

Performance

ITA vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares U.S. Aerospace & Defense ETF (ITA) 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, ITA achieves a 7.69% return, which is significantly higher than NATO's 2.89% return.

ITA

• 1D: -2.34%
• 1M: -3.60%
• 6M: -4.15%
• YTD: 7.69%
• 1Y: 19.36%
• 3Y*: 26.42%
• 5Y*: 18.03%
• 10Y*: 14.84%

NATO

• 1D: -1.66%
• 1M: -3.57%
• 6M: -8.61%
• YTD: 2.89%
• 1Y: 8.35%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

ITA vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
ITA iShares U.S. Aerospace & Defense ETF	7.69%	48.64%	-3.07%
NATO Themes Transatlantic Defense ETF	2.89%	50.95%	0.51%

Correlation

The correlation between ITA and NATO is 0.91, 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	0.91
Correlation (All Time) Calculated using the full available price history since Oct 11, 2024	0.85

The correlation between ITA and NATO has been stable across timeframes, ranging from 0.85 to 0.91 - a consistent structural relationship.

Return for Risk

ITA vs. NATO — Risk / Return Rank

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

ITA

ITA Risk / Return Rank: 29
ITA Sharpe Ratio Rank: 29
ITA Sortino Ratio Rank: 30
ITA Omega Ratio Rank: 27
ITA Calmar Ratio Rank: 30
ITA Martin Ratio Rank: 28

NATO

NATO Risk / Return Rank: 16
NATO Sharpe Ratio Rank: 16
NATO Sortino Ratio Rank: 16
NATO Omega Ratio Rank: 15
NATO Calmar Ratio Rank: 17
NATO Martin Ratio Rank: 16

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.

ITA vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares U.S. Aerospace & Defense ETF (ITA) 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.

	ITA	NATO	Difference
Sharpe ratio: Return per unit of total volatility	0.88	0.38	+0.49
Sortino ratio: Return per unit of downside risk	1.38	0.72	+0.67
Omega ratio: Gain probability vs. loss probability	1.16	1.08	+0.08
Calmar ratio: Return relative to maximum drawdown	1.23	0.52	+0.70
Martin ratio: Return relative to average drawdown	3.17	1.21	+1.96

ITA vs. NATO - Sharpe Ratio Comparison

The current ITA Sharpe Ratio is 0.88, which is higher than the NATO Sharpe Ratio of 0.38. The chart below compares the historical Sharpe Ratios of ITA 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

ITA vs. NATO - Drawdown Comparison

The maximum ITA drawdown since its inception was -59.72%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for ITA and NATO.

Drawdown Indicators

	ITA	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-59.72%	-15.99%	-43.73%
Max Drawdown (1Y) Largest decline over 1 year	-15.82%	-15.99%	+0.17%
Max Drawdown (3Y) Largest decline over 3 years	-15.82%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-18.72%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-51.00%	—	—
Current Drawdown Current decline from peak	-7.93%	-11.01%	+3.08%
Average Drawdown Average peak-to-trough decline	-9.43%	-4.06%	-5.37%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.13%	6.92%	-0.79%

Volatility

ITA vs. NATO - Volatility Comparison

iShares U.S. Aerospace & Defense ETF (ITA) and Themes Transatlantic Defense ETF (NATO) have volatilities of 5.95% and 5.99%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ITA	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.95%	5.99%	-0.04%
Volatility (6M) Calculated over the trailing 6-month period	18.02%	18.37%	-0.35%
Volatility (1Y) Calculated over the trailing 1-year period	22.11%	21.79%	+0.32%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.28%	22.70%	-2.42%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.24%	22.70%	+0.54%

ITA vs. NATO - Expense Ratio Comparison

ITA has a 0.38% expense ratio, which is higher than NATO's 0.35% expense ratio.

Dividends

ITA vs. NATO - Dividend Comparison

ITA's dividend yield for the trailing twelve months is around 0.46%, more than NATO's 0.44% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ITA iShares U.S. Aerospace & Defense ETF	0.46%	0.55%	0.85%	0.93%	0.95%	0.82%	1.07%	1.54%	1.13%	0.91%	1.07%	1.04%
NATO Themes Transatlantic Defense ETF	0.44%	0.45%	0.08%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both ITA and NATO in my portfolio?

With a correlation of 0.91, ITA and NATO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, ITA or NATO?

NATO has higher volatility (5.99%) compared to ITA (5.95%). In terms of maximum drawdown, ITA dropped -59.72% vs NATO's -15.99%.

Which ETF is better, ITA or NATO?

On 1-year performance, ITA leads with 19.36% vs 8.35% for NATO. On fees, NATO is cheaper at 0.35% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, ITA or NATO?

Over the 1-year period, ITA has performed better with a 19.36% return vs 8.35%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, ITA or NATO?

NATO is cheaper with a 0.35% expense ratio, compared with 0.38% for ITA.

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

ITA has the higher dividend yield at 0.46%, compared with 0.44% for NATO.

What is the main difference between ITA and NATO?

ITA tracks Dow Jones U.S. Select Aerospace & Defense Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. They also come from different issuers: iShares and Themes. Their fees differ too: 0.38% for ITA and 0.35% for NATO.

Which has better risk-adjusted returns?

ITA currently has the higher Sharpe Ratio (0.88 vs 0.38), 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.