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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:

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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

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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?

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    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.
    – Brian Borchers
    Mar 24 at 18:18

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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).

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