I wanted to invest in the Vanguard S&P 500 ETF which has the ISIN code US9229083632

However I just discovered it is not available in my country. As an alternative I am considering investing in Vanguard S&P 500 UCITS ETF which has the ISIN code IE00B3XXRP09

I understand that they are different financial products, exchanged on different markets with different currencies.

However, by reading their description they seem to work exactly the same way. I do not understand why one of them has a 3 Years Annualised returns of 18.48% while the other has 13.18%.

Is it the same think if I invest in the second one as if I invest in the first one?

4 Answers 4


One is priced in US dollars and the other is priced in euro. The euro has appreciated against the US dollar over the past three years, hence the lower return in euro than in dollars.

  • 1
    So what would happen if OP bought both? Would he actually lose money to the forex risk, or would the broker's accounting end up cancelling it out?
    – Superbest
    Mar 21, 2018 at 0:41
  • 6
    @Superbest: The difference is whether the forex risk is internal or external to the ETF. The actual risk to you is the same.
    – MSalters
    Mar 21, 2018 at 7:55
  • @MSalters So would you lose money due to the exchange rate from buying the Euro-denominated asset, or not?
    – Superbest
    Mar 27, 2018 at 23:50
  • @Superbest In what currency do you care about losing money?
    – Mike Scott
    Mar 28, 2018 at 6:00
  • @Superbest: No. It doesn't matter whether the ETF does the conversion itself, or your broker when you sell the ETF.
    – MSalters
    Mar 28, 2018 at 7:02

I understand that they are different financial products, exchanged on different markets with different currencies.

You're right, that's the difference. One is VOO, the other is VOO priced in euros on a different exchange.

I do not understand why one of them has a 3 Years Annualised returns of 18.48% while the other has 13.18%.

Without looking further I'd attribute this to currency exchange differences.


Very roughly, three years ago the exchange rate was 1USD=0.9EUR while now it is 1USD=0.8EUR. Let us use those and imagine ABC corp was trading three years ago at 100USD and has risen to 150USD today. The annual return in dollars is the 1/3 power of 1.5, which is about 14.47%. In euros it has risen from 90 to 120, so the return is the 1/3 power of 120/90=4/3, about 10.06%. If you are a dollar denominated investor and bought it on the euro market you would have paid 100USD to buy the share, which was then converted to 90EUR and the share purchased. When it is sold three years later you would receive 120EUR which would convert to 150USD. Aside from exchange costs, you are the same place either way. Similarly, a euro denominated investor would realize the same appreciation either way. The higher return in dollars would be compensated by the lowered exchange rate at the end.

The reason we think of exchange rates changing the return on an investment is because we normally think of the return on a stock in its native currency. If we think a stock that appreciates 15% in a year in its native currency is doing well, you add to or subtract from that the change in exchange rate to your own currency. If instead of buying ABC corp, which returned 14.47% in its native dollars, you had bought DEF corp which returned 14.47% in its native euros any investor would be better off because the euro was gaining in value as well. Once you have decided what to buy it doesn't matter (up to exchange costs) what currency you use to buy it.

  • 2
    The conclusion is not that it doesn't matter in which you invest but to invest in the one in your currency. Why waste the exchange fees?
    – DonQuiKong
    Mar 21, 2018 at 5:06
  • @DonQuiKong There are no exchange fees. You pay in the currency of the exchange where you buy the shares, regardless of which currency the fund reports its value in.
    – Cephalopod
    Mar 22, 2018 at 9:38
  • @Cephalopod the answer itself says otherwise. Either the assumptions or the conclusion are wrong.
    – DonQuiKong
    Mar 22, 2018 at 10:52
  • @Cephalopod: If you have dollars and want to invest in the euro one, you need to get euros somehow. After you sell the shares you will probably want to change the euros you get back to dollars. You may well incur fees on those transactions. This is a good reason to invest in the one that is your native currency-the people running the fund can probably exchange more attractively than you can. I wanted to show how (absent the fees) it didn't matter which you invest in even though the nominal performance is different. Mar 22, 2018 at 14:31
  • @RossMillikan no you don't. If you buy at an exchange that supports Dollars, you are giving your Dollars to the previous owner of the shares and when you sell you receive Dollars from the next owner. It does not matter at all in which currency the fund company measures the share value.
    – Cephalopod
    Mar 22, 2018 at 20:12

The difference is the "UCITS" in the name. In short it means it is regulated and thus tradeable in the European Union.

Taken from investopedia:

BREAKING DOWN 'Undertakings For The Collective Investment Of Transferable Securities - UCITS'

In everyday usage, a UCITS is a mutual fund based in the European Union. UCITS funds are perceived as safe and well-regulated investments and are popular in Europe, South America and Asia among investors who prefer not to invest in a single public limited company but rather among diversified unit trusts spread out within the European Union.

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