I would like to understand why in the following chart, the CHF-hedged ETF tracking the S&P500 is performing so much worse than the one tracking the S&P 500 in USD:

just etf: compare hedged and non-hedged S&P 500

The striking thing is that the hedged version is down 19.6% whereas the non-hedged version is down only 15.2%.

Few more notes:

  • exchange rate virtually the same: one year ago, CHF 1 was worth USD 1.08623 and today, CHF 1 is worth USD 1.0774
  • TER of the non-hedged is 0.07% whereas the one from the hedged one is 0.20%

So I made a simple calculation by simulating what would have happened to CHF 1000 had I invested them into both of these ETFs one year ago:


  • convert CHF 1000 on the 8th of January 2022 --> USD 1086
  • ETF is down 15.2% on the 8th of January 2023 --> USD 930
  • convert back to CHF on the 8th of January 2023 --> left with CHF 863


  • ETF is down 19.6% on the 8th of January 2023 --> left with CHF 804

So had I bought the hedged ETF, I would have lost an additional CHF 59 in on year.

I don't understand where this is coming from.. I thought the price of hedging was included in the TER so that shouldn't be the source. Furthermore, while there is some difference in the exchange rate in the past year, it is so small that can't explain the difference either.

So, does anybody know where this difference is coming from?

  • Are you sure this is all such funds? I'd guess either the hedging strategy isn't working in the current market, or the fact that a hedged fund has much higher fees than a simple index fund because they have to pay the fund managers.
    – keshlam
    Commented Jan 8, 2023 at 9:00
  • 2
    It only hedges USD currency in the index back to CHF on a monthly basis. Also, it is normal to have a gain or loss relative to an unhedged position, after all, that is the whole purpose of the hedging.
    – AKdemy
    Commented Jan 8, 2023 at 10:49


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