NATO vs. XDEF

Last updated Jun 24, 2026

NATO (Themes Transatlantic Defense ETF) and XDEF (Xtrackers Europe Defense Technologies ETF) are both Aerospace & Defense funds - NATO tracks the Solactive Transatlantic Aerospace and Defense Index while XDEF tracks the STOXX Europe Total Market Defence, Space and Cybersecurity Innovation 50-25 Index. Both are passively managed. Their correlation of 0.81 suggests significant overlap in exposure. Both charge a 0.35% expense ratio.

Performance

NATO vs. XDEF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Themes Transatlantic Defense ETF (NATO) and Xtrackers Europe Defense Technologies ETF (XDEF). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

NATO

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

XDEF

• 1D: -0.23%
• 1M: -2.40%
• YTD: —
• 6M: —
• 1Y: —
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

NATO vs. XDEF - Yearly Performance Comparison

	2026 (YTD)
NATO Themes Transatlantic Defense ETF	4.58%
XDEF Xtrackers Europe Defense Technologies ETF	-99.17%

Correlation

The correlation between NATO and XDEF is 0.81, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (All Time) Calculated using the full available price history since Jan 2, 2026	0.81

Return for Risk

NATO vs. XDEF — Risk / Return Rank

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

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

XDEF

Risk / return metrics aren't available yet — we need at least 12 months of trading data to calculate them.

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. XDEF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Themes Transatlantic Defense ETF (NATO) and Xtrackers Europe Defense Technologies ETF (XDEF). 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	XDEF	Difference
Sharpe ratio: Return per unit of total volatility	0.81	—	—
Sortino ratio: Return per unit of downside risk	1.31	—	—
Omega ratio: Gain probability vs. loss probability	1.15	—	—
Calmar ratio: Return relative to maximum drawdown	1.09	—	—
Martin ratio: Return relative to average drawdown	2.65	—	—

Drawdowns

NATO vs. XDEF - Drawdown Comparison

The maximum NATO drawdown since its inception was -15.99%, smaller than the maximum XDEF drawdown of -99.30%. Use the drawdown chart below to compare losses from any high point for NATO and XDEF.

Drawdown Indicators

	NATO	XDEF	Difference
Max Drawdown Largest peak-to-trough decline	-15.99%	-99.30%	+83.31%
Max Drawdown (1Y) Largest decline over 1 year	-15.99%	—	—
Current Drawdown Current decline from peak	-9.55%	-99.26%	+89.71%
Average Drawdown Average peak-to-trough decline	-3.89%	-73.02%	+69.13%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.57%	—	—

Volatility

Volatility by Period

	NATO	XDEF	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.57%	—	—
Volatility (6M) Calculated over the trailing 6-month period	18.35%	—	—
Volatility (1Y) Calculated over the trailing 1-year period	21.46%	148.20%	-126.74%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.72%	148.20%	-125.48%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.72%	148.20%	-125.48%

NATO vs. XDEF - Expense Ratio Comparison

Both NATO and XDEF have an expense ratio of 0.35%.

Dividends

NATO vs. XDEF - Dividend Comparison

NATO's dividend yield for the trailing twelve months is around 0.43%, less than XDEF's 1.52% yield.

Position	TTM	2025	2024
NATO Themes Transatlantic Defense ETF	0.43%	0.45%	0.08%
XDEF Xtrackers Europe Defense Technologies ETF	1.52%	0.00%	0.00%

Frequently Asked Questions

Can I hold both NATO and XDEF in my portfolio?

NATO and XDEF have a correlation of 0.81, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which ETF is better, NATO or XDEF?

Both ETFs have the same 0.35% expense ratio. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF is cheaper, NATO or XDEF?

NATO and XDEF have the same expense ratio: 0.35% per year.

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

XDEF has the higher dividend yield at 1.52%, compared with 0.43% for NATO.

What is the main difference between NATO and XDEF?

NATO tracks Solactive Transatlantic Aerospace and Defense Index, while XDEF tracks STOXX Europe Total Market Defence, Space and Cybersecurity Innovation 50-25 Index. They also come from different issuers: Themes and Xtrackers.