NATO vs. ITA

Last updated Jun 23, 2026

NATO (Themes Transatlantic Defense ETF) and ITA (iShares U.S. Aerospace & Defense ETF) are both Aerospace & Defense funds - NATO tracks the Solactive Transatlantic Aerospace and Defense Index while ITA tracks the Dow Jones U.S. Select Aerospace & Defense Index. Both are passively managed. Over the past year, NATO returned 18.50% vs 31.18% for ITA. Their correlation of 0.85 suggests significant overlap in exposure. NATO charges 0.35%/yr vs 0.38%/yr for ITA.

Performance

NATO vs. ITA - Performance Comparison

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

Returns By Period

In the year-to-date period, NATO achieves a 4.69% return, which is significantly lower than ITA's 9.85% return.

NATO

• 1D: -1.18%
• 1M: 1.83%
• YTD: 4.69%
• 6M: 4.49%
• 1Y: 18.50%
• 3Y*: —
• 5Y*: —
• 10Y*: —

ITA

• 1D: -1.46%
• 1M: 4.57%
• YTD: 9.85%
• 6M: 7.51%
• 1Y: 31.18%
• 3Y*: 28.43%
• 5Y*: 17.33%
• 10Y*: 15.64%

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

NATO vs. ITA - Yearly Performance Comparison

	2026 (YTD)	2025	2024
NATO Themes Transatlantic Defense ETF	4.69%	50.95%	0.51%
ITA iShares U.S. Aerospace & Defense ETF	9.85%	48.64%	-3.07%

Correlation

The correlation between NATO and ITA is 0.89, 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	0.89
Correlation (All Time) Calculated using the full available price history since Oct 11, 2024	0.85

The correlation between NATO and ITA has been stable across timeframes, ranging from 0.85 to 0.89 - a consistent structural relationship.

Return for Risk

NATO vs. ITA — Risk / Return Rank

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

NATO

NATO Risk / Return Rank: 24
NATO Sharpe Ratio Rank: 25
NATO Sortino Ratio Rank: 26
NATO Omega Ratio Rank: 24
NATO Calmar Ratio Rank: 25
NATO Martin Ratio Rank: 23

ITA

ITA Risk / Return Rank: 39
ITA Sharpe Ratio Rank: 42
ITA Sortino Ratio Rank: 42
ITA Omega Ratio Rank: 38
ITA Calmar Ratio Rank: 41
ITA Martin Ratio Rank: 35

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.

NATO vs. ITA - Risk-Adjusted Trends Comparison

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

	NATO	ITA	Difference
Sharpe ratio: Return per unit of total volatility	0.87	1.43	-0.56
Sortino ratio: Return per unit of downside risk	1.38	2.10	-0.72
Omega ratio: Gain probability vs. loss probability	1.16	1.25	-0.09
Calmar ratio: Return relative to maximum drawdown	1.16	1.98	-0.82
Martin ratio: Return relative to average drawdown	2.83	5.21	-2.37

NATO vs. ITA - Sharpe Ratio Comparison

The current NATO Sharpe Ratio is 0.87, which is lower than the ITA Sharpe Ratio of 1.43. The chart below compares the historical Sharpe Ratios of NATO and ITA, 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

NATO vs. ITA - Drawdown Comparison

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

Drawdown Indicators

	NATO	ITA	Difference
Max Drawdown Largest peak-to-trough decline	-15.99%	-59.72%	+43.73%
Max Drawdown (1Y) Largest decline over 1 year	-15.99%	-15.82%	-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	-9.45%	-5.89%	-3.56%
Average Drawdown Average peak-to-trough decline	-3.88%	-9.45%	+5.57%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.55%	6.00%	+0.55%

Volatility

NATO vs. ITA - Volatility Comparison

The current volatility for Themes Transatlantic Defense ETF (NATO) is 7.56%, while iShares U.S. Aerospace & Defense ETF (ITA) has a volatility of 8.50%. This indicates that NATO experiences smaller price fluctuations and is considered to be less risky than ITA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	NATO	ITA	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.56%	8.50%	-0.94%
Volatility (6M) Calculated over the trailing 6-month period	18.40%	18.55%	-0.15%
Volatility (1Y) Calculated over the trailing 1-year period	21.51%	21.95%	-0.44%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.74%	20.23%	+2.51%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.74%	23.26%	-0.52%

NATO vs. ITA - Expense Ratio Comparison

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

Dividends

NATO vs. ITA - Dividend Comparison

NATO's dividend yield for the trailing twelve months is around 0.43%, less than ITA's 0.45% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ITA iShares U.S. Aerospace & Defense ETF	0.45%	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	0.43%	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 NATO and ITA in my portfolio?

NATO and ITA have a correlation of 0.89, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, NATO or ITA?

ITA has higher volatility (8.50%) compared to NATO (7.56%). In terms of maximum drawdown, NATO dropped -15.99% vs ITA's -59.72%.

Which ETF is better, NATO or ITA?

On 1-year performance, ITA leads with 31.18% vs 18.50% for NATO. On fees, NATO is cheaper at 0.35% per year. On volatility, NATO has been the lower-risk option at 7.56%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, NATO or ITA?

Over the 1-year period, ITA has performed better with a 31.18% return vs 18.50%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, NATO or ITA?

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

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

ITA has the higher dividend yield at 0.45%, compared with 0.43% for NATO.

What is the main difference between NATO and ITA?

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

Which has better risk-adjusted returns?

ITA currently has the higher Sharpe Ratio (1.43 vs 0.87), 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.