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    • d712
    • By d712 16th Sep 17, 6:19 PM
    • 198Posts
    • 14Thanks
    d712
    Tracker discrepancy query
    • #1
    • 16th Sep 17, 6:19 PM
    Tracker discrepancy query 16th Sep 17 at 6:19 PM
    Hello

    I have money invested in a S&P500 tracker, Fidelity Index US W Fund.

    Yesterday it went down by nearly 3%. I checked another S&P500 tracker UBS S&P 500 Index C Fund went down by less than 1% yesterday and the S&P500 index itself showed an upward trend over the course of the week.

    What would have caused such a discrepancy?

    Thanks
Page 1
    • ColdIron
    • By ColdIron 16th Sep 17, 6:34 PM
    • 3,571 Posts
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    ColdIron
    • #2
    • 16th Sep 17, 6:34 PM
    • #2
    • 16th Sep 17, 6:34 PM
    Could be many things but an obvious candidate would be the valuation point, for the Fidelity fund it's 12:00 whilst for the UBS one it's 22:45
    • bowlhead99
    • By bowlhead99 16th Sep 17, 6:42 PM
    • 6,888 Posts
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    bowlhead99
    • #3
    • 16th Sep 17, 6:42 PM
    • #3
    • 16th Sep 17, 6:42 PM
    The index itself went up over the course of the week by about 1.5% (capital value only, ignoring dividends) because of movements in the valuations of consituent shares measured in US dollars.

    A tracker fund measured in US dollars would have delivered roughly the total return of the index (capital value plus dividends, less management fees and operating costs, plus or minus 'tracking error') over the course of the week.

    However, presumably your index publishes its price in pounds and pence. As of Friday, a dollar was only worth 73.6 pence, though it had been worth 75.7 pence only two days earlier, which is about a 3% fall. Over that time the US index in dollars ticked up from 2498 to 2500 (most of the index rise had been in the first three days of the week).

    So if your $2498 holding of US stocks on Wednesday was worth £1891 on Wednesday, unfortunately the $2500 holding of US stocks on Friday is only worth £1840 and you have lost about fifty quid (2.5-3%), consistent with your findings.

    You may find that different funds report different performances due to timing differences. The US market closes at 4pm New York, which is 9pm UK (ignoring the after-hours trading "after the bell" from 4pm to 8pm US). That's where the underlying S&P500 figure would come from in a typical news source.

    But meanwhile a UK-based investment fund may report its value at midday UK time before the US even has breakfast (effectively, the previous day's results for US markets and end of day results for asian markets) ... or midday US time / 5pm UK time after the UK market closes at 4.30pm... or 9pm UK time to catch the end of the US market. Or 11pm UK time to catch stragglers at the end of the US market and make sure all the data is in, but before Asia starts the next day. There can be a percent or more of difference from one end of the scale to the other.

    In the long term this will all come out in the wash but if you measure the return from noon UK Friday 8th September to noon UK Friday 15th you may see quite a different return than the one you would report between 9pm UK time Friday 8th to 9pm UK Friday 15th.
    Last edited by bowlhead99; 16-09-2017 at 6:49 PM.
    • dunstonh
    • By dunstonh 16th Sep 17, 7:29 PM
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    dunstonh
    • #4
    • 16th Sep 17, 7:29 PM
    • #4
    • 16th Sep 17, 7:29 PM
    the S&P500 index itself showed an upward trend over the course of the week.
    Remember that you are not domiciled in the US. In addition to the S&P500 itself, you have to consider currency fluctuations in Sterling/Dollar.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • d712
    • By d712 16th Sep 17, 9:50 PM
    • 198 Posts
    • 14 Thanks
    d712
    • #5
    • 16th Sep 17, 9:50 PM
    • #5
    • 16th Sep 17, 9:50 PM
    Thank you for the responses. That's much appreciated.
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