Why the Vanguard S&P 500 ETF return does not match S&P returns?
Hi Monkeys,
I might be asking a rookie question, but why the share price change of Vanguard S&P 500 ETF denomianted in GBP does not match S&P 500 price change?
I understand that there could be some tracking error over time, but looking at L6M, the two seem to differ quite a bit.
Understand that there are 3 other issues at play, (1) ETF has different time of tradining within the day compared to S&P (NYSE opens at 14:30 UK), (2) There could be some effects due to FX, although I would assume Vanugard hedges for that, (3) ETF price will differ from its NAV due to demand/supply for ETF shares, but overall it should be insignificant from my understanding.
Would apprieciate your help on this, as I am new to personal finances and investing.
Vanguard ETF
S&P 500
fees
Multiple factors, list not comprehensive:
Replication process isn't perfect.
Currency fluctuations.
Dividend tax treatment is different.
Estate tax treatment is different.
Volume and AUM are different.
Market premium is pricing in these differences.
What would be then your recommendation to get exposure to S&P 500 in GBP?
As I understand the Vanguard ETF in long-term should replicate it closely, however, on day-to-day/weekely/and even mothly basis from what it seems it differs quite a bit.
Sed sed sapiente molestias ut voluptatem. Aut qui est quasi non. Nisi eligendi ad eligendi. Corporis quia quia vitae sint provident ad. Vitae esse blanditiis qui aliquid molestiae doloremque.
Sapiente eligendi omnis aliquid similique ab tempore aut minus. Ut quidem soluta hic et voluptas. Ut eius numquam iure iure. Quo praesentium aut adipisci quis minima inventore officia quo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...