Significant Disparity Between My Portfolio and S&P 500 Performance on Interactive Brokers 🤯

Investing / Brokers
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Hello everyone,

First, I wanted to start by expressing my gratitude for the forum and its community, which has been a valuable resource for me :pray:t2:

I’ve been investing with Interactive Brokers for over a year, focusing on USD-accumulating UCITS ETFs.

I’ve noticed a HUGE difference between the performance of my individual holdings, my overall portfolio return, and the S&P500 tracker (see the screenshot).

My main holdings (VUAA, XUTC, and VWRA) have performed well, with returns of +37.56%, +46.34%, and +30.99% respectively (as indicated on justetf), over the past year but it doesn’t reflect on my returns!

However my portfolio return on Interactive Brokers is only showing a gain of +1.06% :exploding_head:, which seems crazy and implausible or I completely missed something…

I have a similar portfolio elsewhere, which has generated a return of +36%. So this aligns with the performance I would expect from these ETFs.

Is there a plausible explanation for this difference in performance? :cry:

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2

Was there any specific timing as to when you added funds to your account/portfolio?

See Time-weighted return - Wikipedia for how TWR is calculated.

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3

The benchmark feature of the IBKR portfolio performance chart is broken if your base currency is not USD. So if your base currency is CHF, you shouldn’t use it. That said, I don’t think this is the main issue in this case.

Are you comparing the same time period? The 1.07% from your screenshot is only over 6 months or so.

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Yes, I recently transferred my funds from my old IBKR account to a new one and also made new deposits since the last months but the chart should take account this, no?

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I think it is better to use MWR % as it would adjust the returns based on how much you invested when.

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I agree it would be better but on IBKR unfortunately it only shows Rate of Return (YTD TWR) and NAV Change I think.

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My account is denominated in USD, and I typically convert my EUR holdings to USD to buy ETFs.

I see for one year from the graph.

I really don’t understand how I can figure it out :cry:

8

In Portfolio Analyst, I can change from TWR to MWR.

grafik
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Might indeed be the timing of your account opening. What are your Top Movers or individual holdings showing?

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I changed it to MWR now.

I don’t know why it starts from June 11 2024.

It seems that the EUR/USD exchange rate is influencing tremendously the performance.

I’m puzzled by this because I typically buy USD when the EUR is strong in order to purchase ETFs denominated in USD.

ChatGPT says that :

The strong positive return on USD and the heavily negative return on EUR suggest that currency exchange rates played a significant role in your portfolio’s overall performance. If your account is denominated in USD and you have significant EUR exposure, the sharp depreciation of EUR would lead to a negative impact when translated to USD, and vice versa.

But it should not impact the performance of my ETFs :face_with_monocle:
My EUR are just on the cash balance to buy USD.

The interface is really complicated I think.

mrwibkr
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10

Why should it? You stated your currency on IBKR is in USD, and so are your ETFs.

But there seems to be something wrong, because how do you have a negative EUR return of -406%? Everything above a 100% loss suggests that you have lost much more than your original investment, which seems like leverage or just wrong reporting.

Ignoring the main overview, what return do you have on your positions?

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11

Maybe they have an FX position (sometimes they appear depending on how you convert things).

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12

Could it be that you have accumulated virtual FX positions?

I had it once, but I don’t remember how did I get rid of it…

(Look what I found in Google :laughing:)

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13

First of all, you should ignore these top movers and losers

What I do is following

  • go to portfolio analyst
  • Go to performance
  • Click INCEPTION (this will give you results from inception of your portfolio till yesterday)
  • Click DAILY
  • Click MWR

You can select a benchmark if you want. Maybe SPY if you want S&P 500 or VT ….

And then you can see your portfolio performance
MTD
YTD
1 yr
3 yr
Inception

Keep in mind . What you are seeing is comparison of what would have happened if you simply invested all the cash in your account into the benchmark on the days you made deposits . That’s what the benchmark performance shows in my view.
And your own performance is result of what you did - like buy ETF, wait and watch to time market, etc

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14

Ooh I think this is it.

I installed TW deskop app but I can not put 0 in FX Portfolio - Virtual FX position because it’s disabled. I’ve searched online and checked other forums for information.

I have IBKR Pro and maybe you can see in my screenshots something wrong in my settings based on your experience?

ibkr1

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Based on my screenshots, the issue might be related to the currency in my cash balance I think?

I have a significant amount of Euros in my cash balance, and since recently the EUR price decreased against the USD, which would explain the negative performance?

As I mentioned, I use IBKR to convert my EUR to USD and then invest in USD.

I also don’t use leverage. My settings are very basic.

Do you think it comes from there?