KDEF vs. NATO

Last updated Aug 2, 2026

KDEF (PLUS Korea Defense Industry Index ETF) and NATO (Themes Transatlantic Defense ETF) are both Aerospace & Defense funds - KDEF tracks the The Korea Defence Industry Index while NATO tracks the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, KDEF returned -8.83% vs 16.21% for NATO. Their 0.38 correlation means their historical movements had little consistent relationship. KDEF charges 0.65%/yr vs 0.35%/yr for NATO.

Performance

KDEF vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in PLUS Korea Defense Industry Index ETF (KDEF) 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, KDEF achieves a -17.97% return, which is significantly lower than NATO's 8.62% return.

KDEF

• 1D: -5.87%
• 1M: -16.92%
• 6M: -37.55%
• YTD: -17.97%
• 1Y: -8.83%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: 47.27%

NATO

• 1D: 0.47%
• 1M: -1.55%
• 6M: -0.50%
• YTD: 8.62%
• 1Y: 16.21%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: 31.95%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
KDEF PLUS Korea Defense Industry Index ETF	$2.93M	$2.70M	$5.83M
NATO Themes Transatlantic Defense ETF	$855.81K	$763.26K	$1.15M

KDEF vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025
KDEF PLUS Korea Defense Industry Index ETF	-17.97%	116.28%
NATO Themes Transatlantic Defense ETF	8.62%	44.00%

Correlation

The correlation between KDEF and NATO is 0.46, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.46
Correlation (All Time) Calculated using the full available price history since Feb 5, 2025	0.38

Return for Risk

KDEF vs. NATO — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

KDEF

KDEF Risk / Return Rank: 8
KDEF Sharpe Ratio Rank: 8
KDEF Sortino Ratio Rank: 9
KDEF Omega Ratio Rank: 9
KDEF Calmar Ratio Rank: 8
KDEF Martin Ratio Rank: 7

NATO

NATO Risk / Return Rank: 29
NATO Sharpe Ratio Rank: 30
NATO Sortino Ratio Rank: 31
NATO Omega Ratio Rank: 29
NATO Calmar Ratio Rank: 30
NATO Martin Ratio Rank: 27

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

KDEF vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for PLUS Korea Defense Industry Index ETF (KDEF) 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.

	KDEF	NATO	Difference
Sharpe ratio: Return per unit of total volatility	-0.22	0.72	-0.95
Sortino ratio: Return per unit of downside risk	0.03	1.18	-1.15
Omega ratio: Gain probability vs. loss probability	1.00	1.14	-0.13
Calmar ratio: Return relative to maximum drawdown	-0.24	0.99	-1.23
Martin ratio: Return relative to average drawdown	-0.65	2.23	-2.88

KDEF vs. NATO - Sharpe Ratio Comparison

The current KDEF Sharpe Ratio is -0.22, which is lower than the NATO Sharpe Ratio of 0.72. The chart below compares the historical Sharpe Ratios of KDEF 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

KDEF vs. NATO - Drawdown Comparison

The maximum KDEF drawdown since its inception was -48.41%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for KDEF and NATO.

Drawdown Indicators

	KDEF	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-48.41%	-15.99%	-32.42%
Max Drawdown (1Y) Largest decline over 1 year	-48.41%	-15.99%	-32.42%
Current Drawdown Current decline from peak	-45.43%	-6.05%	-39.38%
Average Drawdown Average peak-to-trough decline	-9.66%	-4.16%	-5.50%
Ulcer Index Depth and duration of drawdowns from previous peaks	17.58%	7.13%	+10.45%

Volatility

KDEF vs. NATO - Volatility Comparison

PLUS Korea Defense Industry Index ETF (KDEF) has a higher volatility of 20.91% compared to Themes Transatlantic Defense ETF (NATO) at 6.78%. This indicates that KDEF'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

	KDEF	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	20.91%	6.78%	+14.13%
Volatility (6M) Calculated over the trailing 6-month period	43.62%	18.50%	+25.12%
Volatility (1Y) Calculated over the trailing 1-year period	51.45%	21.95%	+29.50%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	50.20%	22.63%	+27.57%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	50.20%	22.63%	+27.57%

KDEF vs. NATO - Expense Ratio Comparison

KDEF has a 0.65% expense ratio, which is higher than NATO's 0.35% expense ratio.

Dividends

KDEF vs. NATO - Dividend Comparison

KDEF's dividend yield for the trailing twelve months is around 8.38%, more than NATO's 0.42% yield.

Position	TTM	2025	2024
KDEF PLUS Korea Defense Industry Index ETF	8.38%	5.06%	0.00%
NATO Themes Transatlantic Defense ETF	0.42%	0.45%	0.08%

Frequently Asked Questions

Can I hold both KDEF and NATO in my portfolio?

KDEF and NATO have a correlation of 0.46, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, KDEF or NATO?

KDEF has higher volatility (20.91%) compared to NATO (6.78%). In terms of maximum drawdown, KDEF dropped -48.41% vs NATO's -15.99%.

Which ETF is better, KDEF or NATO?

On 1-year performance, NATO leads with 16.21% vs -8.83% for KDEF. On fees, NATO is cheaper at 0.35% per year. On volatility, NATO has been the lower-risk option at 6.78%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, KDEF or NATO?

Over the 1-year period, NATO has performed better with a 16.21% return vs -8.83%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, KDEF or NATO?

NATO is cheaper with a 0.35% expense ratio, compared with 0.65% for KDEF.

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

KDEF has the higher dividend yield at 8.38%, compared with 0.42% for NATO.

What is the main difference between KDEF and NATO?

KDEF tracks The Korea Defence Industry Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. They also come from different issuers: PLUS and Themes. Their fees differ too: 0.65% for KDEF and 0.35% for NATO.

Which has better risk-adjusted returns?

NATO currently has the higher Sharpe Ratio (0.72 vs -0.22), 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.