IVV tracks S&P 500 and is traded in USD.
IUSE tracks S&P 500, is traded in EUR and is currency hedged against EUR-USD.
If I understand correctly, 100 USD in IVV should yield the same (relative) returns as 100 EUR in IUSE (ignoring difference in TER). That is, if the USD value of IVV increases +10%, the EUR value of IUSE increases +10%.
Comparing the 1 year returns, there is a >1% difference between IVV and IUSE. The difference in TER is only 0.2% vs 0.04%. I understand that currency hedging won't track 100% accurately, but 1% seems like a significant difference. What is the reason for the discrepancy and is it noise or cost (i.e. is it as likely to be +1% as -1%)?
Submitted September 30, 2018 at 07:28AM by crintax https://ift.tt/2NcaEjM
