S&P 500 Index funds

[NISAninja]

Hi everyone

I'm new here. I've been lurking for a while though. I appreciate all the knowledge being shared here. I've set up my ideco and am now working on my NISA

I have a question about how an index fund like the emaxis slim s&p500 tracks the actual s&p500. My (seemingly incorrect) understanding is that if the s&p500 goes up 1 percent then the index fund goes up 1 percent.
But while s&p 500 was up almost 3 percent last week, the emaxis slim s&p500 fund is down 1.51 percent (according to the SBI website) for the same period. Can anyone explain this? Thanks!

[RetireJapan]

Most likely that would be a reflection of foreign currency movements.

The S&P500 is denominated in dollars, while the eMaxis Slim funds are denominated in yen.

[NISAninja]

Thank you. I thought that might be the case.

[Tsumitate Wrestler]

Hi everyone

I'm new here. I've been lurking for a while though. I appreciate all the knowledge being shared here. I've set up my ideco and am now working on my NISA

I have a question about how an index fund like the emaxis slim s&p500 tracks the actual s&p500. My (seemingly incorrect) understanding is that if the s&p500 goes up 1 percent then the index fund goes up 1 percent.
But while s&p 500 was up almost 3 percent last week, the emaxis slim s&p500 fund is down 1.51 percent (according to the SBI website) for the same period. Can anyone explain this? Thanks!

Most likely that would be a reflection of foreign currency movements.

The S&P500 is denominated in dollars, while the eMaxis Slim funds are denominated in yen.

In addition, the funds {Mutual funds not ETF} settle and reset prices at the end of the trading day.

So any movement in the US markets on Friday US time, will not be reflected until Monday evening JST.

You can track the index proper and not the vehicle if you want to get a more accurate measure. Remember ETFs and mutual funds are benchmarking to these indexes, but they do not always get it perfect. MUFJ however is very very good in general with their tracking.

This is an example: https://ycharts.com/indices/%5ESPXTRJPY

[TokyoWart]

There was a relatively large move in the dollar-yen exchange rate last week when the PCE (Personal Consumption Expenditures) measure of inflation came in slightly lower than expected which renewed hope in rate cuts by the US Fed which in turn resulted in the yen strengthening from around 158 to the 155 range. That encouraged the S&P 500 to jump as well but lowered the return for yen investors in the index.

[NISAninja]

Thank you everyone.