NATO vs QQQ
Themes Transatlantic Defense ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 108 holdings.
Side-by-Side Comparison
| Metric | NATO | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.18% | |
| AUM | $108M | $496.3B | |
| Dividend Yield | 0.42% | 0.44% | |
| Holdings | 90 | 108 | |
| YTD Return | +6.03% | +16.64% | |
| 1Y Return | +15.77% | +27.27% | |
| 3Y Return (annualized) | - | +25.96% | |
| 5Y Return (annualized) | - | +14.54% | |
| Volatility (annualized) | 18.5% | 30.6% | |
| Max Drawdown | -16.0% | -83.0% | |
| Fund Family | Themes ETFs | Invesco (US) | |
| Category | Equity | Equity | |
| Inception | Oct 10, 2024 | Mar 10, 1999 |
NATO vs QQQ Performance
Themes Transatlantic Defense ETF (NATO) is a ETF from Themes ETFs and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year NATO returned +15.77% while QQQ returned +27.27%. Year to date, NATO is up 6.03% versus a gain of 16.64% for QQQ.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 18.5% for NATO. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -16.0% for NATO and -83.0% for QQQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.35. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
NATO charges 0.35% per year while QQQ charges 0.18%. On a $10,000 position that is $35 vs $18 annually, a gap of $17 per year that compounds over a long holding period. On income, NATO currently yields 0.42% against 0.44% for QQQ.
Holdings Overlap
NATO and QQQ share 4 holdings out of 182 unique holdings combined, representing a 1.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, NATO or QQQ?
NATO has an expense ratio of 0.35% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $17 per year of difference.
Which performed better, NATO or QQQ?
Over the past year NATO returned +15.77% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (2 years), NATO annualized +30.51% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, NATO or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 18.5% for NATO. Worst drawdown: NATO -16.0% vs QQQ -83.0%.
Should I hold both NATO and QQQ?
NATO and QQQ have a monthly-return correlation of 0.35, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between NATO and QQQ?
NATO and QQQ share 4 common holdings with a 1.0% weight overlap. Combined, they hold 182 unique securities.
Which pays a higher dividend, NATO or QQQ?
NATO yields 0.42% while QQQ yields 0.44%, so QQQ currently pays the higher dividend yield.
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