The ETF I have in mind is an S&P500 index in Canada called "vfv.to. It started in Nov. 2012 and has gone up over 100% in value up until today while the actual S&P has only gone up a little over 60% over the same time? Now if I was an investor at the start I certainly wouldn't be complaining but I'm just wondering why this is the case. Thanks.
First - The S&P index doesn't include dividends. So, over 10 years, the index might go from say 1000 to 2000, but I expect my investment to go from $1000 to closer to $2600 as a mutual fund or ETF would reinvest the dividends, typically. From Jan 2013 to Dec 2015, the S&P (with dividends) grew 53%. With the year to date return, we are close to 60% higher during this time.
Also, I'll guess that you are looking at the Canadian-Denominated return. The Canadian dollar fell from US$1.003 to US$0.748 during this time, so the shares have gone up more in $CD than in $US. Combine these 2 factors and you have you answer, almost precisely.
(Note - it may more more sense to flip the exchange rates. The $US bough .9975 $CD in 2012, and now buys CD$1.338. This accounts for a 34% rise just from the exchange rate.)
Edit - per @NickR's comment on the question, it appears dividends are paid out from the ETF, so the total difference for this answer is based on exchange rates.
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