SHLD vs. NATO

Last updated Jun 26, 2026

SHLD (Global X Defense Tech ETF) and NATO (Themes Transatlantic Defense ETF) are both Aerospace & Defense funds - SHLD tracks the Global X Defense Tech Index while NATO tracks the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, SHLD returned -0.23% vs 16.63% for NATO. A 0.78 correlation means they provide meaningful diversification when combined. SHLD charges 0.50%/yr vs 0.35%/yr for NATO.

Performance

SHLD vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Global X Defense Tech ETF (SHLD) 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, SHLD achieves a -10.17% return, which is significantly lower than NATO's 4.07% return.

SHLD

• 1D: -1.15%
• 1M: -11.99%
• YTD: -10.17%
• 6M: -12.31%
• 1Y: -0.23%
• 3Y*: —
• 5Y*: —
• 10Y*: —

NATO

• 1D: 0.39%
• 1M: -0.37%
• YTD: 4.07%
• 6M: 3.40%
• 1Y: 16.63%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

SHLD vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
SHLD Global X Defense Tech ETF	-10.17%	74.16%	-0.80%
NATO Themes Transatlantic Defense ETF	4.07%	50.95%	0.51%

Correlation

The correlation between SHLD and NATO 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 (1Y) Calculated over the trailing 1-year period	0.81
Correlation (All Time) Calculated using the full available price history since Oct 11, 2024	0.78

The correlation between SHLD and NATO has been stable across timeframes, ranging from 0.78 to 0.81 - a consistent structural relationship.

Return for Risk

SHLD vs. NATO — Risk / Return Rank

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

SHLD

SHLD Risk / Return Rank: 9
SHLD Sharpe Ratio Rank: 9
SHLD Sortino Ratio Rank: 9
SHLD Omega Ratio Rank: 9
SHLD Calmar Ratio Rank: 9
SHLD Martin Ratio Rank: 9

NATO

NATO Risk / Return Rank: 24
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

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.

SHLD vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Global X Defense Tech ETF (SHLD) 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.

	SHLD	NATO	Difference
Sharpe ratio: Return per unit of total volatility	-0.01	0.78	-0.79
Sortino ratio: Return per unit of downside risk	0.17	1.26	-1.10
Omega ratio: Gain probability vs. loss probability	1.02	1.15	-0.13
Calmar ratio: Return relative to maximum drawdown	-0.01	1.04	-1.05
Martin ratio: Return relative to average drawdown	-0.03	2.51	-2.54

SHLD vs. NATO - Sharpe Ratio Comparison

The current SHLD Sharpe Ratio is -0.01, which is lower than the NATO Sharpe Ratio of 0.78. The chart below compares the historical Sharpe Ratios of SHLD 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

SHLD vs. NATO - Drawdown Comparison

The maximum SHLD drawdown since its inception was -25.40%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for SHLD and NATO.

Drawdown Indicators

	SHLD	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-25.40%	-15.99%	-9.41%
Max Drawdown (1Y) Largest decline over 1 year	-25.40%	-15.99%	-9.41%
Current Drawdown Current decline from peak	-25.40%	-9.98%	-15.42%
Average Drawdown Average peak-to-trough decline	-3.55%	-3.92%	+0.37%
Ulcer Index Depth and duration of drawdowns from previous peaks	8.97%	6.63%	+2.34%

Volatility

SHLD vs. NATO - Volatility Comparison

Global X Defense Tech ETF (SHLD) has a higher volatility of 9.01% compared to Themes Transatlantic Defense ETF (NATO) at 7.39%. This indicates that SHLD'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

	SHLD	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	9.01%	7.39%	+1.62%
Volatility (6M) Calculated over the trailing 6-month period	20.22%	18.20%	+2.02%
Volatility (1Y) Calculated over the trailing 1-year period	24.85%	21.47%	+3.38%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	21.39%	22.68%	-1.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.39%	22.68%	-1.29%

SHLD vs. NATO - Expense Ratio Comparison

SHLD has a 0.50% expense ratio, which is higher than NATO's 0.35% expense ratio.

Dividends

SHLD vs. NATO - Dividend Comparison

SHLD's dividend yield for the trailing twelve months is around 0.61%, more than NATO's 0.43% yield.

Position	TTM	2025	2024	2023
NATO Themes Transatlantic Defense ETF	0.43%	0.45%	0.08%	0.00%
SHLD Global X Defense Tech ETF	0.61%	0.55%	0.53%	0.26%

Frequently Asked Questions

Can I hold both SHLD and NATO in my portfolio?

SHLD and NATO 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 is riskier, SHLD or NATO?

SHLD has higher volatility (9.01%) compared to NATO (7.39%). In terms of maximum drawdown, SHLD dropped -25.40% vs NATO's -15.99%.

Which ETF is better, SHLD or NATO?

On 1-year performance, NATO leads with 16.63% vs -0.23% for SHLD. On fees, NATO is cheaper at 0.35% per year. On volatility, NATO has been the lower-risk option at 7.39%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SHLD or NATO?

Over the 1-year period, NATO has performed better with a 16.63% return vs -0.23%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SHLD or NATO?

NATO is cheaper with a 0.35% expense ratio, compared with 0.50% for SHLD.

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

SHLD has the higher dividend yield at 0.61%, compared with 0.43% for NATO.

What is the main difference between SHLD and NATO?

SHLD tracks Global X Defense Tech Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. They also come from different issuers: Global X and Themes. Their fees differ too: 0.50% for SHLD and 0.35% for NATO.

Which has better risk-adjusted returns?

NATO currently has the higher Sharpe Ratio (0.78 vs -0.01), 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.