NATO vs SPY
Themes Transatlantic Defense ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | NATO | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.09% | |
| AUM | $108M | $821.1B | |
| Dividend Yield | 0.42% | 1.01% | |
| Holdings | 90 | 505 | |
| YTD Return | +6.31% | +12.22% | |
| 1Y Return | +16.67% | +20.83% | |
| 3Y Return (annualized) | - | +21.70% | |
| 5Y Return (annualized) | - | +12.98% | |
| Volatility (annualized) | 18.4% | 15.3% | |
| Max Drawdown | -16.0% | -56.5% | |
| Fund Family | Themes ETFs | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Oct 10, 2024 | Jan 22, 1993 |
NATO vs SPY Performance
Themes Transatlantic Defense ETF (NATO) is a ETF from Themes ETFs and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year NATO returned +16.67% while SPY returned +20.83%. Year to date, NATO is up 6.31% versus a gain of 12.22% for SPY.
Risk: Volatility and Drawdowns
NATO has been the more volatile fund, with annualized monthly volatility of 18.4% compared with 15.3% for SPY. 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 -56.5% for SPY. 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 0.47. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
NATO charges 0.35% per year while SPY charges 0.09%. On a $10,000 position that is $35 vs $9 annually, a gap of $26 per year that compounds over a long holding period. On income, NATO currently yields 0.42% against 1.01% for SPY.
Holdings Overlap
NATO and SPY share 15 holdings out of 573 unique holdings combined, representing a 2.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, NATO or SPY?
NATO has an expense ratio of 0.35% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $26 per year of difference.
Which performed better, NATO or SPY?
Over the past year NATO returned +16.67% vs +20.83% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (2 years), NATO annualized +30.75% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, NATO or SPY?
NATO has been the more volatile fund at 18.4% annualized versus 15.3% for SPY. Worst drawdown: NATO -16.0% vs SPY -56.5%.
Should I hold both NATO and SPY?
NATO and SPY have a monthly-return correlation of 0.47, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between NATO and SPY?
NATO and SPY share 15 common holdings with a 2.5% weight overlap. Combined, they hold 573 unique securities.
Which pays a higher dividend, NATO or SPY?
NATO yields 0.42% while SPY yields 1.01%, so SPY currently pays the higher dividend yield.
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