CUT vs. PDN

Last updated Jul 14, 2026

CUT (Invesco MSCI Global Timber ETF) and PDN (Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF) are both exchange-traded funds - CUT is a Materials fund tracking the Beacon Global Timber Index, while PDN is a Foreign Small & Mid Cap Equities fund tracking the FTSE RAFI Developed x US Mid/Small. Both are passively managed. Over the past 10 years, CUT returned 3.95%/yr vs 8.38%/yr for PDN. A 0.74 correlation means they provide meaningful diversification when combined. CUT charges 0.55%/yr vs 0.49%/yr for PDN.

Performance

CUT vs. PDN - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco MSCI Global Timber ETF (CUT) and Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, CUT achieves a -4.74% return, which is significantly lower than PDN's 7.96% return. Over the past 10 years, CUT has underperformed PDN with an annualized return of 3.95%, while PDN has yielded a comparatively higher 8.38% annualized return.

CUT

• 1D: -1.24%
• 1M: -0.70%
• 6M: -8.57%
• YTD: -4.74%
• 1Y: -8.82%
• 3Y*: -0.71%
• 5Y*: -3.71%
• 10Y*: 3.95%

PDN

• 1D: -1.17%
• 1M: -2.19%
• 6M: 4.13%
• YTD: 7.96%
• 1Y: 19.06%
• 3Y*: 15.79%
• 5Y*: 6.38%
• 10Y*: 8.38%

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

CUT vs. PDN - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
CUT Invesco MSCI Global Timber ETF	-4.74%	-5.92%	1.82%	8.65%	-16.38%	12.29%	18.05%	23.35%	-21.70%	30.41%
PDN Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF	7.96%	38.34%	0.57%	13.35%	-17.35%	9.03%	10.65%	19.17%	-18.38%	30.74%

Correlation

The correlation between CUT and PDN is 0.64, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.64
Correlation (3Y) Calculated over the trailing 3-year period	0.67
Correlation (5Y) Calculated over the trailing 5-year period	0.73
Correlation (10Y) Calculated over the trailing 10-year period	0.74
Correlation (All Time) Calculated using the full available price history since Nov 9, 2007	0.74

The correlation between CUT and PDN has been stable across timeframes, ranging from 0.64 to 0.74 - a consistent structural relationship.

CUT vs. PDN - Sectors Allocation Comparison

Sectors	CUT	PDN
Consumer Cyclical	45.0%	11.7%
Basic Materials	41.3%	10.5%
Real Estate	10.1%	8.7%
Industrials	3.6%	23.2%
Financial Services	0.3%	12.7%
Consumer Defensive	0.2%	5.3%
Technology	0.1%	10.1%
Communication Services	-	4.5%
Energy	-	4.8%
Healthcare	-	5.7%
Utilities	-	2.7%

Return for Risk

CUT vs. PDN — Risk / Return Rank

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

CUT

CUT Risk / Return Rank: 5
CUT Sharpe Ratio Rank: 5
CUT Sortino Ratio Rank: 5
CUT Omega Ratio Rank: 5
CUT Calmar Ratio Rank: 5
CUT Martin Ratio Rank: 5

PDN

PDN Risk / Return Rank: 44
PDN Sharpe Ratio Rank: 44
PDN Sortino Ratio Rank: 44
PDN Omega Ratio Rank: 45
PDN Calmar Ratio Rank: 42
PDN Martin Ratio Rank: 46

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.

CUT vs. PDN - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco MSCI Global Timber ETF (CUT) and Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	CUT	PDN	Difference
Sharpe ratio: Return per unit of total volatility	-0.47	1.25	-1.72
Sortino ratio: Return per unit of downside risk	-0.57	1.81	-2.39
Omega ratio: Gain probability vs. loss probability	0.94	1.23	-0.30
Calmar ratio: Return relative to maximum drawdown	-0.45	1.70	-2.15
Martin ratio: Return relative to average drawdown	-0.88	6.09	-6.96

CUT vs. PDN - Sharpe Ratio Comparison

The current CUT Sharpe Ratio is -0.47, which is lower than the PDN Sharpe Ratio of 1.25. The chart below compares the historical Sharpe Ratios of CUT and PDN, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

CUT vs. PDN - Drawdown Comparison

The maximum CUT drawdown since its inception was -70.03%, which is greater than PDN's maximum drawdown of -59.32%. Use the drawdown chart below to compare losses from any high point for CUT and PDN.

Drawdown Indicators

	CUT	PDN	Difference
Max Drawdown Largest peak-to-trough decline	-70.03%	-59.32%	-10.71%
Max Drawdown (1Y) Largest decline over 1 year	-19.62%	-11.26%	-8.36%
Max Drawdown (3Y) Largest decline over 3 years	-22.23%	-13.25%	-8.98%
Max Drawdown (5Y) Largest decline over 5 years	-30.40%	-33.68%	+3.28%
Max Drawdown (10Y) Largest decline over 10 years	-45.76%	-41.94%	-3.82%
Current Drawdown Current decline from peak	-22.31%	-4.62%	-17.69%
Average Drawdown Average peak-to-trough decline	-15.30%	-11.55%	-3.75%
Ulcer Index Depth and duration of drawdowns from previous peaks	10.10%	3.14%	+6.96%

Volatility

CUT vs. PDN - Volatility Comparison

Invesco MSCI Global Timber ETF (CUT) has a higher volatility of 5.71% compared to Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN) at 4.84%. This indicates that CUT's price experiences larger fluctuations and is considered to be riskier than PDN based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	CUT	PDN	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.71%	4.84%	+0.87%
Volatility (6M) Calculated over the trailing 6-month period	14.70%	13.26%	+1.44%
Volatility (1Y) Calculated over the trailing 1-year period	18.75%	15.37%	+3.38%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.57%	16.47%	+2.10%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.05%	16.90%	+3.15%

CUT vs. PDN - Expense Ratio Comparison

CUT has a 0.55% expense ratio, which is higher than PDN's 0.49% expense ratio.

Dividends

CUT vs. PDN - Dividend Comparison

CUT's dividend yield for the trailing twelve months is around 2.58%, less than PDN's 3.30% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
CUT Invesco MSCI Global Timber ETF	2.58%	2.46%	3.05%	2.44%	2.58%	1.57%	1.65%	2.67%	3.43%	1.57%	2.08%	1.52%
PDN Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF	3.30%	3.36%	3.36%	3.16%	2.68%	2.42%	1.79%	2.60%	2.21%	2.42%	2.16%	2.06%

Frequently Asked Questions

Can I hold both CUT and PDN in my portfolio?

CUT and PDN have a correlation of 0.64, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, CUT or PDN?

CUT has higher volatility (5.71%) compared to PDN (4.84%). In terms of maximum drawdown, CUT dropped -70.03% vs PDN's -59.32%.

Which ETF is better, CUT or PDN?

On 10-year performance, PDN leads with 8.38% vs 3.95% for CUT. On fees, PDN is cheaper at 0.49% per year. On volatility, PDN has been the lower-risk option at 4.84%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, CUT or PDN?

Over the 10-year period, PDN has performed better with a 8.38% return vs 3.95%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, CUT or PDN?

PDN is cheaper with a 0.49% expense ratio, compared with 0.55% for CUT.

Which ETF pays a higher dividend yield, CUT or PDN?

PDN has the higher dividend yield at 3.30%, compared with 2.58% for CUT.

What is the main difference between CUT and PDN?

CUT is categorized as Materials, while PDN is Foreign Small & Mid Cap Equities. CUT tracks Beacon Global Timber Index, while PDN tracks FTSE RAFI Developed x US Mid/Small. Their fees differ too: 0.55% for CUT and 0.49% for PDN.

Which has better risk-adjusted returns?

PDN currently has the higher Sharpe Ratio (1.25 vs -0.47), 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.