OriginaveWhy your world ETF lags the S&P 500: the EUR/USD effect
Your fund earns returns in dollars. You live in euros. Here is exactly what that costs — or pays — year by year.
In 2025 a world tracker returned about +23% in US dollars but only about +9% in euros, because the euro gained roughly 13% against the dollar. Same fund, same companies, same year — a 14-point gap, purely from currency. If you checked a fund fact sheet that year you saw the first number; if you checked your broker account you saw the second.
This page shows that gap with real fund data instead of theory: the same index owned through a US-listed fund (returns in USD) and through its Xetra EUR line (returns in euros, the ones a European actually pockets).
MSCI World: the same index in USD and EUR
URTH is a US-listed MSCI World fund (returns in USD); EUNL is the iShares Core MSCI World EUR line on Xetra. A negative gap means the euro investor got less that year; a positive gap means the falling euro quietly boosted their return. Small fee and tracking differences between the two funds are a rounding error next to the currency swings.
| Year | In USD (URTH) | In EUR (EUNL) | Currency gap |
|---|---|---|---|
| 2026 (so far) | +9.81% | +11.86% | +2.05% |
| 2025 | +21.36% | +7.90% | -13.46% |
| 2024 | +18.66% | +25.93% | +7.27% |
| 2023 | +23.95% | +20.13% | -3.82% |
| 2022 | -17.97% | -13.59% | +4.38% |
| 2021 | +22.27% | +32.71% | +10.44% |
| 2020 | +15.78% | +5.48% | -10.30% |
| 2019 | +28.15% | +31.34% | +3.20% |
| 2018 | -8.56% | -5.13% | +3.43% |
| 2017 | +22.95% | +7.71% | -15.24% |
| 2016 | +7.31% | +10.91% | +3.61% |
| 2015 | -0.64% | +10.81% | +11.45% |
Where the gap comes from
A world ETF holds mostly American companies, priced in dollars. When you buy its EUR line on Xetra, you effectively own dollars with extra steps: your return is the stocks' return plus whatever the dollar did against the euro. A year where US stocks gain 10% and the dollar loses 10% against the euro is, for you, a year of roughly zero.
The gap works both ways. In 2021 and 2022 a strengthening dollar padded European investors' returns; in 2025 a surging euro ate them. Over decades these swings have largely washed out — but any single year can be dominated by them, which is why your fund and the American headlines often disagree.
Currency is not the whole story, though. A world index is only about two-thirds US stocks — when Europe and Japan trail the US, a world tracker lags the S&P 500 in any currency. Currency explains USD-vs-EUR gaps for the same index; composition explains world-vs-US gaps. Our SXR8 vs EUNL comparison shows the composition effect in euros, year by year.
S&P 500: the same 500 companies, two currencies
SPY is the original US-listed S&P 500 fund; SXR8 is the iShares Core S&P 500 EUR line on Xetra. Identical index — the gap column is almost purely the EUR/USD exchange rate.
| Year | In USD (SPY) | In EUR (SXR8) | Currency gap |
|---|---|---|---|
| 2026 (so far) | +10.09% | +12.04% | +1.95% |
| 2025 | +17.72% | +4.73% | -12.99% |
| 2024 | +24.89% | +32.32% | +7.43% |
| 2023 | +26.18% | +22.47% | -3.70% |
| 2022 | -18.18% | -14.31% | +3.87% |
| 2021 | +28.73% | +40.74% | +12.01% |
| 2020 | +18.33% | +6.80% | -11.53% |
| 2019 | +31.22% | +34.49% | +3.27% |
| 2018 | -4.57% | -1.05% | +3.52% |
| 2017 | +21.71% | +6.67% | -15.03% |
| 2016 | +12.00% | +14.83% | +2.83% |
| 2015 | +1.23% | +12.52% | +11.29% |
Frequently asked
Why is my world ETF down when the S&P 500 is up?
Usually because of the currency, not the companies. A world ETF holds mostly US stocks that earn returns in dollars; your Xetra line is priced in euros. When the euro strengthens against the dollar, the same portfolio is worth fewer euros — in 2025 that gap was roughly 14 percentage points. Headlines quote the USD number; your account shows the EUR one.
Which return will I actually get — the USD or the EUR one?
No single number is 'the' return — it depends on your currency. If you buy an ETF in euros on Xetra, the euro-denominated return is the one you actually experience, regardless of what the USD fact sheet says. Every euro figure on this site is computed from the Xetra EUR line's prices.
Does a currency-hedged ETF fix this?
A currency-hedged share class removes most of the EUR/USD swing, for a hedging cost that eats into returns. Hedging looks brilliant in years the euro rallies and wasteful in years it falls; over long horizons currency moves have historically washed out for equity investors, which is why most long-term investors hold unhedged funds. It's a preference about the ride, not a free lunch.
Is it always the currency's fault?
Not always. A world ETF is only about two-thirds US stocks — the rest is Europe, Japan and other markets. In years when non-US markets trail the US, a world tracker lags the S&P 500 in any currency. Currency explains the gap between the same index in USD and EUR; composition explains the gap between a world index and a US-only one.
Related reading: the full USD-vs-EUR returns dataset (every year, three indexes), currency effect and total return in the glossary, or see every year's EUR outcome on the yearly performance dashboard.