SMCF vs. NATO

Last updated Jun 4, 2026

SMCF (Themes US Small Cap Cash Flow Champions ETF) and NATO (Themes Transatlantic Defense ETF) are both exchange-traded funds - SMCF is a Small Cap Value Equities fund tracking the Solactive US Small Cap Cash Flow Champions Index - Benchmark TR Gross, while NATO is a Aerospace & Defense fund tracking the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, SMCF returned 32.87% vs 13.50% for NATO. At a 0.44 correlation, their price movements are largely independent. SMCF charges 0.29%/yr vs 0.35%/yr for NATO.

Performance

SMCF vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Themes US Small Cap Cash Flow Champions ETF (SMCF) 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, SMCF achieves a 13.75% return, which is significantly higher than NATO's 1.39% return.

SMCF

• 1D: -1.14%
• 1M: -1.09%
• YTD: 13.75%
• 6M: 13.63%
• 1Y: 32.87%
• 3Y*: —
• 5Y*: —
• 10Y*: —

NATO

• 1D: -1.87%
• 1M: 2.05%
• YTD: 1.39%
• 6M: 7.82%
• 1Y: 13.50%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

SMCF vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
SMCF Themes US Small Cap Cash Flow Champions ETF	13.75%	9.56%	-1.11%
NATO Themes Transatlantic Defense ETF	1.39%	50.95%	0.35%

Correlation

The correlation between SMCF and NATO is 0.39, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.39
Correlation (All Time) Calculated using the full available price history since Oct 14, 2024	0.44

Return for Risk

SMCF vs. NATO — Risk / Return Rank

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

SMCF

SMCF Risk / Return Rank: 67
SMCF Sharpe Ratio Rank: 61
SMCF Sortino Ratio Rank: 63
SMCF Omega Ratio Rank: 59
SMCF Calmar Ratio Rank: 85
SMCF Martin Ratio Rank: 68

NATO

NATO Risk / Return Rank: 19
NATO Sharpe Ratio Rank: 19
NATO Sortino Ratio Rank: 20
NATO Omega Ratio Rank: 19
NATO Calmar Ratio Rank: 20
NATO Martin Ratio Rank: 19

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.

SMCF vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Themes US Small Cap Cash Flow Champions ETF (SMCF) 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.

	SMCF	NATO	Difference
Sharpe ratio: Return per unit of total volatility	2.05	0.65	+1.40
Sortino ratio: Return per unit of downside risk	2.95	1.07	+1.88
Omega ratio: Gain probability vs. loss probability	1.36	1.13	+0.24
Calmar ratio: Return relative to maximum drawdown	4.63	0.85	+3.78
Martin ratio: Return relative to average drawdown	12.46	2.19	+10.27
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

SMCF vs. NATO - Sharpe Ratio Comparison

The current SMCF Sharpe Ratio is 2.05, which is higher than the NATO Sharpe Ratio of 0.65. The chart below compares the historical Sharpe Ratios of SMCF 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.

Sharpe Ratios by Period

	SMCF	NATO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.05	0.65	+1.40
Sharpe Ratio (All Time) Calculated using the full available price history	0.91	1.34	-0.43

Drawdowns

SMCF vs. NATO - Drawdown Comparison

The maximum SMCF drawdown since its inception was -28.48%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for SMCF and NATO.

Drawdown Indicators

	SMCF	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-28.48%	-15.99%	-12.49%
Max Drawdown (1Y) Largest decline over 1 year	-7.13%	-15.99%	+8.86%
Current Drawdown Current decline from peak	-2.44%	-12.30%	+9.86%
Average Drawdown Average peak-to-trough decline	-5.29%	-3.71%	-1.58%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.65%	6.17%	-3.52%

Volatility

SMCF vs. NATO - Volatility Comparison

The current volatility for Themes US Small Cap Cash Flow Champions ETF (SMCF) is 3.55%, while Themes Transatlantic Defense ETF (NATO) has a volatility of 7.97%. This indicates that SMCF experiences smaller price fluctuations and is considered to be less risky than NATO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SMCF	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.55%	7.97%	-4.42%
Volatility (6M) Calculated over the trailing 6-month period	10.00%	17.65%	-7.65%
Volatility (1Y) Calculated over the trailing 1-year period	16.18%	20.71%	-4.53%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.31%	22.61%	-2.30%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.31%	22.61%	-2.30%

SMCF vs. NATO - Expense Ratio Comparison

SMCF has a 0.29% expense ratio, which is lower than NATO's 0.35% expense ratio.

Dividends

SMCF vs. NATO - Dividend Comparison

SMCF's dividend yield for the trailing twelve months is around 3.44%, more than NATO's 0.44% yield.

Position	TTM	2025	2024
NATO Themes Transatlantic Defense ETF	0.44%	0.45%	0.08%
SMCF Themes US Small Cap Cash Flow Champions ETF	3.44%	3.91%	0.61%

Frequently Asked Questions

Can I hold both SMCF and NATO in my portfolio?

SMCF and NATO have a correlation of 0.39, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, SMCF or NATO?

NATO has higher volatility (7.97%) compared to SMCF (3.55%). In terms of maximum drawdown, SMCF dropped -28.48% vs NATO's -15.99%.

Which ETF is better, SMCF or NATO?

On 1-year performance, SMCF leads with 32.87% vs 13.50% for NATO. On fees, SMCF is cheaper at 0.29% per year. On volatility, SMCF has been the lower-risk option at 3.55%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SMCF or NATO?

Over the 1-year period, SMCF has performed better with a 32.87% return vs 13.50%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SMCF or NATO?

SMCF is cheaper with a 0.29% expense ratio, compared with 0.35% for NATO.

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

SMCF has the higher dividend yield at 3.44%, compared with 0.44% for NATO.

What is the main difference between SMCF and NATO?

SMCF is categorized as Small Cap Value Equities, while NATO is Aerospace & Defense. SMCF tracks Solactive US Small Cap Cash Flow Champions Index - Benchmark TR Gross, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. Their fees differ too: 0.29% for SMCF and 0.35% for NATO.

Which has better risk-adjusted returns?

SMCF currently has the higher Sharpe Ratio (2.05 vs 0.65), 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.