0

From 22/03/2022 to 24/03/2023, these are the S&P total market index and the Vanguard U.S. Equity Index Fund:

S&P total market index:

enter image description here

Price on 24/03/2022: $4619.20

Price on 24/03/2023: $3974.30

Price down by ~13.75%

Vanguard U.S. Equity Index Fund

enter image description here

Price on 24/03/2022: £752.42

Price on 24/03/2023: £722.15

Price down by ~6.51%

I understand the index fund is not perfect and cannot replicate the market index perfectly, but this difference is huge. How is this possible?

1
  • 5
    Your first chart is the index in US dollars, while your second chart is a British fund in UK pounds. There's been a larger than 6% shift in the exchange rate over the last year. If you happen to be holding the UK fund and your expenses are in UK pounds, then you're lucky. Commented Mar 24, 2023 at 18:18

1 Answer 1

3

As Brian Borchers mentioned, it's due to the fact that S&P total market index and Vanguard U.S. Equity Index Fund are expressed in two different currencies in your graphs.

Converting the Vanguard U.S. Equity Index Fund into USD:

  • Price on 24/03/2022: £752.42 ~= 752.42 * 1.32 USD ~= 993 USD.
  • Price on 24/03/2023: £722.15 ~= 722.15 * 1.22 USD ~= 881 USD.

Price (in USD) down by ~12.7% (=993/881-1).

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .