CUT vs. VAW

Last updated Jun 4, 2026

CUT (Invesco MSCI Global Timber ETF) and VAW (Vanguard Materials ETF) are both Materials funds - CUT tracks the Beacon Global Timber Index while VAW tracks the MSCI US Investable Market Materials 25/50 Index. Both are passively managed. Over the past 10 years, CUT returned 3.93%/yr vs 10.35%/yr for VAW. A 0.80 correlation means they provide meaningful diversification when combined. CUT charges 0.55%/yr vs 0.10%/yr for VAW.

Performance

CUT vs. VAW - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco MSCI Global Timber ETF (CUT) and Vanguard Materials ETF (VAW). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, CUT achieves a -5.58% return, which is significantly lower than VAW's 13.17% return. Over the past 10 years, CUT has underperformed VAW with an annualized return of 3.93%, while VAW has yielded a comparatively higher 10.35% annualized return.

CUT

• 1D: 0.52%
• 1M: 0.52%
• YTD: -5.58%
• 6M: -2.56%
• 1Y: -7.17%
• 3Y*: 0.54%
• 5Y*: -4.30%
• 10Y*: 3.93%

VAW

• 1D: -0.23%
• 1M: 2.57%
• YTD: 13.17%
• 6M: 16.23%
• 1Y: 22.68%
• 3Y*: 12.47%
• 5Y*: 5.80%
• 10Y*: 10.35%

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

CUT vs. VAW - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
CUT Invesco MSCI Global Timber ETF	-5.58%	-5.92%	1.82%	8.65%	-16.38%	12.29%	18.05%	23.35%	-21.70%	30.41%
VAW Vanguard Materials ETF	13.17%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%

Correlation

The correlation between CUT and VAW is 0.73, 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	0.73
Correlation (3Y) Calculated over the trailing 3-year period	0.75
Correlation (5Y) Calculated over the trailing 5-year period	0.80
Correlation (10Y) Calculated over the trailing 10-year period	0.81
Correlation (All Time) Calculated using the full available price history since Nov 12, 2007	0.80

The correlation between CUT and VAW has been stable across timeframes, ranging from 0.73 to 0.81 - a consistent structural relationship.

CUT vs. VAW - Sectors Allocation Comparison

Sectors	CUT	VAW
Basic Materials	51.8%	90.2%
Consumer Cyclical	39.1%	8.3%
Industrials	5.1%	1.0%
Real Estate	4.5%	-
Consumer Defensive	0.2%	0.0%
Financial Services	0.1%	-
Technology	0.1%	0.1%
Communication Services	-	-
Energy	-	0.5%
Healthcare	-	0.5%
Utilities	-	-

Return for Risk

CUT vs. VAW — 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: 6
CUT Martin Ratio Rank: 5

VAW

VAW Risk / Return Rank: 34
VAW Sharpe Ratio Rank: 35
VAW Sortino Ratio Rank: 34
VAW Omega Ratio Rank: 33
VAW Calmar Ratio Rank: 34
VAW Martin Ratio Rank: 35

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. VAW - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco MSCI Global Timber ETF (CUT) and Vanguard Materials ETF (VAW). 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.

	CUT	VAW	Difference
Sharpe ratio: Return per unit of total volatility	-0.39	1.29	-1.68
Sortino ratio: Return per unit of downside risk	-0.44	1.86	-2.30
Omega ratio: Gain probability vs. loss probability	0.95	1.22	-0.27
Calmar ratio: Return relative to maximum drawdown	-0.37	1.70	-2.06
Martin ratio: Return relative to average drawdown	-0.81	5.56	-6.37
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

CUT vs. VAW - Sharpe Ratio Comparison

The current CUT Sharpe Ratio is -0.39, which is lower than the VAW Sharpe Ratio of 1.29. The chart below compares the historical Sharpe Ratios of CUT and VAW, 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

	CUT	VAW	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	-0.39	1.29	-1.68
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	-0.23	0.30	-0.53
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.20	0.49	-0.29
Sharpe Ratio (All Time) Calculated using the full available price history	0.11	0.39	-0.28

Drawdowns

CUT vs. VAW - Drawdown Comparison

The maximum CUT drawdown since its inception was -70.03%, which is greater than VAW's maximum drawdown of -62.17%. Use the drawdown chart below to compare losses from any high point for CUT and VAW.

Drawdown Indicators

	CUT	VAW	Difference
Max Drawdown Largest peak-to-trough decline	-70.03%	-62.17%	-7.86%
Max Drawdown (1Y) Largest decline over 1 year	-19.62%	-13.42%	-6.20%
Max Drawdown (3Y) Largest decline over 3 years	-22.23%	-23.21%	+0.98%
Max Drawdown (5Y) Largest decline over 5 years	-30.40%	-25.50%	-4.90%
Max Drawdown (10Y) Largest decline over 10 years	-45.76%	-41.13%	-4.63%
Current Drawdown Current decline from peak	-22.99%	-3.79%	-19.20%
Average Drawdown Average peak-to-trough decline	-15.26%	-9.63%	-5.63%
Ulcer Index Depth and duration of drawdowns from previous peaks	8.88%	4.09%	+4.79%

Volatility

CUT vs. VAW - Volatility Comparison

Invesco MSCI Global Timber ETF (CUT) and Vanguard Materials ETF (VAW) have volatilities of 5.90% and 6.08%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	CUT	VAW	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.90%	6.08%	-0.18%
Volatility (6M) Calculated over the trailing 6-month period	14.05%	13.93%	+0.12%
Volatility (1Y) Calculated over the trailing 1-year period	18.57%	17.65%	+0.92%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.48%	19.62%	-1.14%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.22%	21.20%	-0.98%

CUT vs. VAW - Expense Ratio Comparison

CUT has a 0.55% expense ratio, which is higher than VAW's 0.10% expense ratio.

Dividends

CUT vs. VAW - Dividend Comparison

CUT's dividend yield for the trailing twelve months is around 2.61%, more than VAW's 1.36% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
CUT Invesco MSCI Global Timber ETF	2.61%	2.46%	3.05%	2.44%	2.58%	1.57%	1.65%	2.67%	3.43%	1.57%	2.08%	1.52%
VAW Vanguard Materials ETF	1.36%	1.55%	1.70%	1.72%	1.98%	1.44%	1.67%	1.94%	2.03%	1.63%	1.67%	2.30%

Frequently Asked Questions

Can I hold both CUT and VAW in my portfolio?

CUT and VAW have a correlation of 0.73, 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 VAW?

VAW has higher volatility (6.08%) compared to CUT (5.90%). In terms of maximum drawdown, CUT dropped -70.03% vs VAW's -62.17%.

Which ETF is better, CUT or VAW?

On 10-year performance, VAW leads with 10.35% vs 3.93% for CUT. On fees, VAW is cheaper at 0.10% per year. On volatility, CUT has been the lower-risk option at 5.90%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, CUT or VAW?

Over the 10-year period, VAW has performed better with a 10.35% return vs 3.93%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, CUT or VAW?

VAW is cheaper with a 0.10% expense ratio, compared with 0.55% for CUT.

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

CUT has the higher dividend yield at 2.61%, compared with 1.36% for VAW.

What is the main difference between CUT and VAW?

CUT tracks Beacon Global Timber Index, while VAW tracks MSCI US Investable Market Materials 25/50 Index. They also come from different issuers: Invesco and Vanguard. Their fees differ too: 0.55% for CUT and 0.10% for VAW.

Which has better risk-adjusted returns?

VAW currently has the higher Sharpe Ratio (1.29 vs -0.39), 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.