NZSX50 - Good News!

[Hoop]

Expansion on my last post #90.

Amazingly the DOW index index increased exactly the same rate as the NZX50 in 2009

Date....................DOW.................NZX50

01-01-2009...........8772.................2716
31-12-2009..........10428................3230
.........................+18.9%.............+18.9%

On face value it seems the investor would be equally better off.

But..
Not so ...

For the NZ investor investing in the DOW index fund in 2009

example
Buy the DOW index in US$ .... 1st Jan outlay NZ$ 15853....8772 x (1/0.57)
Sell the DOW index in US$.....31st Dec receive NZ$ 14483....10428 x (1/0.72)

Loss............NZ$(1370) -8.6%


For the American investor investing in the NZX50 index fund in 2009

example
Buy the NZX50 index in NZ$ .... 1st Jan outlay US$ 1548....2716 / (1/0.57)
Sell the NZX50 index in NZ$.....31st Dec receive US$ 2325....3230 / (1/0.72)

Profit...........US$777...+50.2%