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La rentabilidad en EUR, USD y CHF

Escrito 25 Mar 14

Os dejo un artículo interesante de la gestora value Braun, Von Wyss and Muller:

Fund performance in EUR and USD

The BWM Website now allows users to analyze returns in Euros and Dollars, too, a convenience for those who think in those currencies or who want to compare our funds to investments denominated in them. These figures are a good deal higher than in Francs, because of that currency’s strength. The difference, of course, is pretty much cosmetic. We explain why.


 Georg von Wyss on 24.03.2014


We have just updated the performance calculator on this website to enable analysis of our returns not just in Swiss Francs but also in Euros and US Dollars. For those unfamiliar with it, this tool allows users to calculate performance statistics of our funds, such as total and annual average return over any given time period, and make comparisons with indices (alpha, beta, tracking error, etc.). The data entry mask, which you will find here for the  Classic Global and the  Classic Value funds, now also allows you to choose a currency. The default is Swiss Francs. The calculator then converts the NAVs and Indices and uses these as the inputs for the analyses. This should make it less cumbersome for those who want to compare our track records to those of other investments.


The results are gratifying, as you can see from the table below. Whereas the compound annual average return of the Classic Global Equity Fund from inception on Dec. 16, 1997 to March 18, 2014 is 422.0% in Swiss Francs, it is 578.6% in Euros and 760.0% in Dollars. The difference between the returns of the Classic Value Equity Fund is even more striking. It looks as if the fund did twice as well in Dollars as in Francs.


Classic Global Equity Fund vom


Jährliche Durchschnittsrendite










Classic Value Equity Fund vom
Jährliche Durchschnittsrendite  




A comparison of the total increase of the NAV of the Classic Global Equity Fund over this period is yet another impressive illustration of the power of compound interest. The 10.7% annual return in Francs led to an NAV on 18.3.2014 of CHF 521.95 as compared to a starting NAV of CHF 100 on 16.12.1997. But in Euros, the NAV is not 5.2 times higher, but nearly 7 times more, thanks to a seemingly small annual difference in returns of just less than 2 percentage points. Add another 1.6%-points of annual returns, as in the case of the dollar, and your money has increased nearly ninefold!


The chart below shows the development of the NAV of the Classic Global Equity Fund in the three currencies. What is noteworthy is that in May of 2013 the Dollar-NAV exceeded its old highs of May 2007, and the Euro-NAV did so about one month later. We are still waiting for that to happen in Francs. Naturally our track record would look much nicer, if we reported to you in one of the other currencies.






But of course this is pretty much cosmetic. The Dollar investor has made the largest percentage gain, but he has also experienced the most inflation. Whereas it took USD 100 to buy a basket of goods at the end of 1997, it takes about USD 148 today (by the way, these remarks are addressed to anyone using Dollars other than Americans).* Similarly, one needs 137 Euros to purchase as much as EUR 100 did when we started our fund. There has been the least inflation in Switzerland. The Franc has lost only 10% of its purchasing power, so you need 111 of them today to be as well off as in 1997.


The funds’ performance has thankfully more than compensated inflation. A unit of the fund can now buy 4.8 baskets of goods as compared to only one at the end of 1997. Because the Franc has strengthened more against the Euro and the Dollar than what inflation differentials alone can explain, the same unit can buy over five baskets in Euros and nearly six in dollars. In other words, the Franc is overvalued at the moment on the basis of its purchasing power parity (PPP).


In theory, that ought not to happen. Prices of goods in Switzerland should fall relative to those abroad, or the Franc should decline in value until equivalent amounts of any currency can buy the same basket of goods. In fact,  the over- or undervaluation of currency exchange rates relative to PPP can persist for a good deal of time (the Franc has been overvalued for some years now). At some point it will go back to PPP, if not undershoot, but it is almost impossible to predict when this will happen. Therefore, long-term equity investors like us are better off not trying to speculate on such occurrences. If you are interested in when we hedge (we don’t normally do so) and an explanation for why hedging is of little use to the long-term investor, please see our articles (unfortunately available in German only) from  October and  November of 2012. The second of these includes a chart of the development of PPPs over time.


--Georg von Wyss


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