Why Your S&P 500 Investment in SGD Feels Less Rewarding Despite All-Time Highs in 2025
Introduction
If you invested 100,000 SGD in the S&P 500 at the start of 2025, you might expect a solid return by mid-year given the U.S. stock market’s strong performance and record highs. However, when you check your portfolio in Singapore dollars, the gains might feel surprisingly modest. Why is that?
This article unpacks how currency fluctuations can impact your investment returns and why, despite the S&P 500 hitting all-time highs, your SGD-denominated returns may seem disheartening.
The S&P 500’s Strong Performance in 2025
The S&P 500, a benchmark for U.S. equities, has delivered a total return (including dividends) of approximately 7.18% year-to-date (YTD) as of early July 2025. This reflects solid price appreciation and dividend income, driven by strong corporate earnings and positive economic data.
For a USD-based investor, this is an attractive return in just over half a year.
The Forex Factor: SGD vs. USD
However, as a Singapore-based investor, you need to consider the currency exchange rate because the S&P 500 is traded in U.S. dollars.
At the start of 2025, 1 SGD was worth about 0.7572 USD.
By mid-July 2025, the SGD strengthened to around 0.7808 USD.
This means the Singapore dollar appreciated roughly 3.13% against the U.S. dollar during this period.
How Forex Affects Your Returns
When your SGD strengthens against USD, your USD investments are worth less when converted back to SGD — even if the USD investment itself has gained value.
To calculate your effective return in SGD:
Start with the S&P 500’s 7.18% USD return.
Adjust for the 3.13% appreciation of SGD against USD.
The net result is an approximate 3.9% YTD return in SGD terms.
So, your initial 100,000 SGD investment would have grown to about 103,900 SGD by mid-July 2025, less than the 107,180 SGD you might expect if you ignored forex.
Why Does This Matter?
Currency movements can significantly impact international investments. Even when markets perform well, a stronger home currency can reduce your returns when converted back.
For Singapore investors, the SGD’s appreciation against the USD in 2025 has offset nearly half of the S&P 500’s gains.
Conclusion
While the U.S. stock market has hit record highs and delivered solid returns in 2025, your SGD-denominated investment’s performance is tempered by currency effects. This highlights the importance of considering forex risk in global investing.
If you’re investing internationally, it’s wise to monitor currency trends or consider hedging strategies to protect your returns.
Cory Diary
2025-0714
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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.
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