NATO vs. KDEF

Last updated Aug 4, 2026

NATO (Themes Transatlantic Defense ETF) and KDEF (PLUS Korea Defense Industry Index ETF) are both Aerospace & Defense funds - NATO tracks the Solactive Transatlantic Aerospace and Defense Index while KDEF tracks the The Korea Defence Industry Index. Both are passively managed. Over the past year, NATO returned 19.00% vs -3.32% for KDEF. Their 0.38 correlation means their historical movements had little consistent relationship. NATO charges 0.35%/yr vs 0.65%/yr for KDEF.

Performance

NATO vs. KDEF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Themes Transatlantic Defense ETF (NATO) and PLUS Korea Defense Industry Index ETF (KDEF). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, NATO achieves a 11.23% return, which is significantly higher than KDEF's -13.02% return.

NATO

• 1D: 2.40%
• 1M: 0.81%
• 6M: 1.90%
• YTD: 11.23%
• 1Y: 19.00%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: 33.53%

KDEF

• 1D: 6.04%
• 1M: -11.91%
• 6M: -31.60%
• YTD: -13.02%
• 1Y: -3.32%
• 3Y*: —
• 5Y*: —
• 10Y*: —
• ALL TIME*: 52.85%

*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	$2.88M	$2.61M	$5.49M
NATO Themes Transatlantic Defense ETF	$882.24K	$720.46K	$1.15M

NATO vs. KDEF - Yearly Performance Comparison

	2026 (YTD)	2025
NATO Themes Transatlantic Defense ETF	11.23%	44.00%
KDEF PLUS Korea Defense Industry Index ETF	-13.02%	116.28%

Correlation

The correlation between NATO and KDEF is 0.47, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.47
Correlation (All Time) Calculated using the full available price history since Feb 5, 2025	0.38

Return for Risk

NATO vs. KDEF — Risk / Return Rank

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

NATO

NATO Risk / Return Rank: 33
NATO Sharpe Ratio Rank: 34
NATO Sortino Ratio Rank: 36
NATO Omega Ratio Rank: 33
NATO Calmar Ratio Rank: 34
NATO Martin Ratio Rank: 30

KDEF

KDEF Risk / Return Rank: 11
KDEF Sharpe Ratio Rank: 10
KDEF Sortino Ratio Rank: 13
KDEF Omega Ratio Rank: 13
KDEF Calmar Ratio Rank: 10
KDEF Martin Ratio Rank: 10

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.

NATO vs. KDEF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Themes Transatlantic Defense ETF (NATO) and PLUS Korea Defense Industry Index ETF (KDEF). 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	KDEF	Difference
Sharpe ratio: Return per unit of total volatility	0.86	-0.06	+0.93
Sortino ratio: Return per unit of downside risk	1.37	0.27	+1.09
Omega ratio: Gain probability vs. loss probability	1.16	1.03	+0.13
Calmar ratio: Return relative to maximum drawdown	1.19	-0.07	+1.26
Martin ratio: Return relative to average drawdown	2.67	-0.19	+2.86

NATO vs. KDEF - Sharpe Ratio Comparison

The current NATO Sharpe Ratio is 0.86, which is higher than the KDEF Sharpe Ratio of -0.06. The chart below compares the historical Sharpe Ratios of NATO and KDEF, 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. KDEF - Drawdown Comparison

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

Drawdown Indicators

	NATO	KDEF	Difference
Max Drawdown Largest peak-to-trough decline	-15.99%	-48.41%	+32.42%
Max Drawdown (1Y) Largest decline over 1 year	-15.99%	-48.41%	+32.42%
Current Drawdown Current decline from peak	-3.80%	-42.14%	+38.34%
Average Drawdown Average peak-to-trough decline	-4.16%	-9.74%	+5.58%
Ulcer Index Depth and duration of drawdowns from previous peaks	7.13%	17.77%	-10.64%

Volatility

NATO vs. KDEF - Volatility Comparison

The current volatility for Themes Transatlantic Defense ETF (NATO) is 6.62%, while PLUS Korea Defense Industry Index ETF (KDEF) has a volatility of 21.66%. This indicates that NATO experiences smaller price fluctuations and is considered to be less risky than KDEF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	NATO	KDEF	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.62%	21.66%	-15.04%
Volatility (6M) Calculated over the trailing 6-month period	18.63%	44.03%	-25.40%
Volatility (1Y) Calculated over the trailing 1-year period	22.11%	51.82%	-29.71%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.67%	50.36%	-27.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.67%	50.36%	-27.69%

NATO vs. KDEF - Expense Ratio Comparison

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

Dividends

NATO vs. KDEF - Dividend Comparison

NATO's dividend yield for the trailing twelve months is around 0.41%, less than KDEF's 7.90% yield.

Position	TTM	2025	2024
KDEF PLUS Korea Defense Industry Index ETF	7.90%	5.06%	0.00%
NATO Themes Transatlantic Defense ETF	0.41%	0.45%	0.08%

Frequently Asked Questions

Can I hold both NATO and KDEF in my portfolio?

NATO and KDEF have a correlation of 0.47, 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 KDEF?

KDEF has higher volatility (21.66%) compared to NATO (6.62%). In terms of maximum drawdown, NATO dropped -15.99% vs KDEF's -48.41%.

Which ETF is better, NATO or KDEF?

On 1-year performance, NATO leads with 19.00% vs -3.32% for KDEF. On fees, NATO is cheaper at 0.35% per year. On volatility, NATO has been the lower-risk option at 6.62%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, NATO or KDEF?

Over the 1-year period, NATO has performed better with a 19.00% return vs -3.32%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, NATO or KDEF?

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

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

KDEF has the higher dividend yield at 7.90%, compared with 0.41% for NATO.

What is the main difference between NATO and KDEF?

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

Which has better risk-adjusted returns?

NATO currently has the higher Sharpe Ratio (0.86 vs -0.06), 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.