Satrix S&P500 down 4.5 vs Actual S&P500 up 1%

[silbo]

Hi all, I have asked a simular question in the past, but like from Friday until now, the Satrix S&P500 lost 4.5% value, I get its different and there are multiple factors, but surely if the actual S&P500 goes up by 1% the Satrix one should not fall by 4.5%, that's a massive 5.5% difference.

Also, the currency exchanged remained the same for both dollar and pound to rand. So how is this possible?

 

[cardeal38]

@silbo The satrix fund is a local feeder fund in rand and you're comparing it to the index in dollars. In that time, the rand strengthened to the dollar.

 

[felixna]

@silbo Temporary gains for the rand, don’t even stress.

 

[silbo]

@felixna Would 50c gain really make such a huge difference? It's only 2.5%... I mean maybe that could translate to 4% with some other factors.... I guesse. I should've just bought more to be fair

 

[itiswellwithmysoul78]

@silbo There are many factors at play:

1. The main difference is Satrix is showing you ZAR returns and the S&P 500 shows you the USD returns. Therefore if the ZAR strengthens vs the USD over the same time period you effectively will have a lower return in ZAR. The exchange rate definitely didn't remain the same, it reached R18.45 today and was over R19 at times last week.
2. Timing of the price is important - We don't know the prices you are using to calculate these returns, but it's important to make sure they match up. When I use Yahoo Finance from close 4 April to close 9 April, I get -2.27% for Satrix and 1.22% for S&P500.
3. It's not a perfect system, if the ZAR depreciated 3%, it doesn't necessarily mean that if the S&P 500 returns 1% and the Satrix will return -2%. This can give you an indication of return, but on a day to day basis there will be many small differences, because, at the end of the day the Satrix is a ZAR vehicle handling ZAR contributions and withdrawals, it tracks the index but cannot do it perfectly.

 

[crewresfera1981]

@silbo Buy into a US index fund and you can track the difference

 

[carlv_52]

@silbo As you say, there are multiple factors. Most likely small discrepancies in the weighting of the holdings can do this. It's a tracking fund, and tracking is always a little bit off so you just have to take it on the chin and rest easy knowing that historically they have tracked really well.