USRD vs. NATO

Last updated Jun 4, 2026

USRD (Themes US R&D Champions ETF) and NATO (Themes Transatlantic Defense ETF) are both exchange-traded funds - USRD is a Large Cap Blend Equities fund tracking the Solactive US R&D Champions Index, while NATO is a Aerospace & Defense fund tracking the Solactive Transatlantic Aerospace and Defense Index. Both are passively managed. Over the past year, USRD returned 31.55% vs 13.50% for NATO. A 0.51 correlation means they provide meaningful diversification when combined. USRD charges 0.29%/yr vs 0.35%/yr for NATO.

Performance

USRD vs. NATO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Themes US R&D Champions ETF (USRD) 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, USRD achieves a 19.83% return, which is significantly higher than NATO's 1.39% return.

USRD

• 1D: -1.22%
• 1M: 13.66%
• YTD: 19.83%
• 6M: 18.09%
• 1Y: 31.55%
• 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)

USRD vs. NATO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
USRD Themes US R&D Champions ETF	19.83%	12.44%	-3.66%
NATO Themes Transatlantic Defense ETF	1.39%	50.95%	0.35%

Correlation

The correlation between USRD and NATO is 0.49, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.49
Correlation (All Time) Calculated using the full available price history since Oct 14, 2024	0.51

The correlation between USRD and NATO has been stable across timeframes, ranging from 0.49 to 0.51 - a consistent structural relationship.

Return for Risk

USRD vs. NATO — Risk / Return Rank

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

USRD

USRD Risk / Return Rank: 52
USRD Sharpe Ratio Rank: 56
USRD Sortino Ratio Rank: 55
USRD Omega Ratio Rank: 53
USRD Calmar Ratio Rank: 48
USRD Martin Ratio Rank: 45

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.

USRD vs. NATO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Themes US R&D Champions ETF (USRD) 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.

	USRD	NATO	Difference
Sharpe ratio: Return per unit of total volatility	1.89	0.65	+1.23
Sortino ratio: Return per unit of downside risk	2.63	1.07	+1.56
Omega ratio: Gain probability vs. loss probability	1.33	1.13	+0.20
Calmar ratio: Return relative to maximum drawdown	2.35	0.85	+1.50
Martin ratio: Return relative to average drawdown	7.30	2.19	+5.10
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

USRD vs. NATO - Sharpe Ratio Comparison

The current USRD Sharpe Ratio is 1.89, which is higher than the NATO Sharpe Ratio of 0.65. The chart below compares the historical Sharpe Ratios of USRD 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

	USRD	NATO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.89	0.65	+1.23
Sharpe Ratio (All Time) Calculated using the full available price history	1.12	1.34	-0.22

Drawdowns

USRD vs. NATO - Drawdown Comparison

The maximum USRD drawdown since its inception was -23.79%, which is greater than NATO's maximum drawdown of -15.99%. Use the drawdown chart below to compare losses from any high point for USRD and NATO.

Drawdown Indicators

	USRD	NATO	Difference
Max Drawdown Largest peak-to-trough decline	-23.79%	-15.99%	-7.80%
Max Drawdown (1Y) Largest decline over 1 year	-13.49%	-15.99%	+2.50%
Current Drawdown Current decline from peak	-1.22%	-12.30%	+11.08%
Average Drawdown Average peak-to-trough decline	-3.70%	-3.71%	+0.01%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.33%	6.17%	-1.84%

Volatility

USRD vs. NATO - Volatility Comparison

The current volatility for Themes US R&D Champions ETF (USRD) is 5.55%, while Themes Transatlantic Defense ETF (NATO) has a volatility of 7.97%. This indicates that USRD 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

	USRD	NATO	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.55%	7.97%	-2.42%
Volatility (6M) Calculated over the trailing 6-month period	13.33%	17.65%	-4.32%
Volatility (1Y) Calculated over the trailing 1-year period	16.79%	20.71%	-3.92%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.24%	22.61%	-3.37%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.24%	22.61%	-3.37%

USRD vs. NATO - Expense Ratio Comparison

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

Dividends

USRD vs. NATO - Dividend Comparison

USRD's dividend yield for the trailing twelve months is around 0.35%, less than NATO's 0.44% yield.

Position	TTM	2025	2024
NATO Themes Transatlantic Defense ETF	0.44%	0.45%	0.08%
USRD Themes US R&D Champions ETF	0.35%	0.42%	2.44%

Frequently Asked Questions

Can I hold both USRD and NATO in my portfolio?

USRD and NATO have a correlation of 0.49, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, USRD or NATO?

NATO has higher volatility (7.97%) compared to USRD (5.55%). In terms of maximum drawdown, USRD dropped -23.79% vs NATO's -15.99%.

Which ETF is better, USRD or NATO?

On 1-year performance, USRD leads with 31.55% vs 13.50% for NATO. On fees, USRD is cheaper at 0.29% per year. On volatility, USRD has been the lower-risk option at 5.55%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, USRD or NATO?

Over the 1-year period, USRD has performed better with a 31.55% return vs 13.50%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, USRD or NATO?

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

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

NATO has the higher dividend yield at 0.44%, compared with 0.35% for USRD.

What is the main difference between USRD and NATO?

USRD is categorized as Large Cap Blend Equities, while NATO is Aerospace & Defense. USRD tracks Solactive US R&D Champions Index, while NATO tracks Solactive Transatlantic Aerospace and Defense Index. Their fees differ too: 0.29% for USRD and 0.35% for NATO.

Which has better risk-adjusted returns?

USRD currently has the higher Sharpe Ratio (1.89 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.