NATO vs VYM
Themes Transatlantic Defense ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 568 holdings.
Side-by-Side Comparison
| Metric | NATO | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.35% | 0.04% | |
| AUM | $103M | $79.0B | |
| Dividend Yield | 0.42% | 2.86% | |
| Holdings | 90 | 568 | |
| YTD Return | +10.67% | +16.78% | |
| 1Y Return | +19.45% | +24.43% | |
| 3Y Return (annualized) | - | +18.60% | |
| 5Y Return (annualized) | - | +12.30% | |
| Volatility (annualized) | 18.4% | 14.6% | |
| Max Drawdown | -16.0% | -58.8% | |
| Fund Family | Themes ETFs | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Oct 10, 2024 | Nov 10, 2006 |
NATO vs VYM Performance
Themes Transatlantic Defense ETF (NATO) is a ETF from Themes ETFs and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year NATO returned +19.45% while VYM returned +24.43%. Year to date, NATO is up 10.67% versus a gain of 16.78% for VYM.
Risk: Volatility and Drawdowns
NATO has been the more volatile fund, with annualized monthly volatility of 18.4% compared with 14.6% for VYM. 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 -58.8% for VYM. 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 0.48. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
NATO charges 0.35% per year while VYM charges 0.04%. On a $10,000 position that is $35 vs $4 annually, a gap of $31 per year that compounds over a long holding period. On income, NATO currently yields 0.42% against 2.86% for VYM.
Holdings Overlap
NATO and VYM share 9 holdings out of 632 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 VYM?
NATO has an expense ratio of 0.35% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $31 per year of difference.
Which performed better, NATO or VYM?
Over the past year NATO returned +19.45% vs +24.43% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (2 years), NATO annualized +34.01% vs +7.11% for VYM. Past performance does not guarantee future results.
Which is riskier, NATO or VYM?
NATO has been the more volatile fund at 18.4% annualized versus 14.6% for VYM. Worst drawdown: NATO -16.0% vs VYM -58.8%.
Should I hold both NATO and VYM?
NATO and VYM have a monthly-return correlation of 0.48, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between NATO and VYM?
NATO and VYM share 9 common holdings with a 2.5% weight overlap. Combined, they hold 632 unique securities.
Which pays a higher dividend, NATO or VYM?
NATO yields 0.42% while VYM yields 2.86%, so VYM currently pays the higher dividend yield.
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