S&P 500 Euro-Denominated Performance Analysis: Currency Impact on Returns

This analysis is based on market data examining the S&P 500 denominated in euros (SPXEUR) performance, as reported on November 6, 2025 [0]. The investigation reveals positive returns across multiple timeframes despite currency headwinds affecting euro-based investors.

The euro has strengthened significantly against the US dollar throughout 2025, with EUR/USD rising approximately 6.94% over the last 12 months to trade at 1.1476 as of November 5, 2025 [1]. This currency appreciation has created a substantial drag on USD-denominated investments when converted back to euros, explaining why the S&P 500 shows positive returns in euro terms but underperforms relative to its USD-denominated performance.

Market data confirms positive performance across key metrics for the S&P 500 EUR index (^SPXEUR) as of October 31, 2025 [2]:

• 1-year return
  : 14.24% (annualized)
• YTD performance
  : Positive returns confirmed
• 6-month return
  : 21.73%
• 3-month return
  : 7.32%

The S&P 500 Total Return EUR (^SPXTREUR) shows slightly different performance as of November 4, 2025 [3]:

• 1-year return
  : 13.88% (annualized)
• YTD performance
  : Positive
• 6-month return
  : 18.55%

European alternatives have indeed provided better returns for euro-based investors in 2025. The STOXX Europe 600 delivered approximately 16.40% in EUR returns year-to-date as of October 31, 2025 [4], outperforming the S&P 500 in euro terms during the current year.

However, historical data demonstrates the S&P 500’s long-term superiority, with the index delivering a compound annual growth rate of 11.02% over the last 33 years in euro terms, accompanied by a Sharpe ratio of 0.68 [5].

SPY (SPDR S&P 500 ETF) is currently trading at $670.23, reflecting a 1.08% decline on November 6, 2025 [0]. The index has gained 4.13% over the past 60 trading days but continues to exhibit notable volatility of 0.68% [0].

The currency impact is substantial enough that euro-based investors face meaningful decisions regarding hedging strategies. The choice between unhedged US equity exposure, currency-hedged alternatives, or European indices depends on individual currency outlooks and risk tolerance levels.

J.P. Morgan forecasts suggest continued euro strength, with EUR/USD expected to reach 1.19 by September 2025 and 1.22 by March 2026 [6]. This projection indicates potential additional currency pressure on unhedged US equity returns for euro-based investors.

The performance differential reflects underlying monetary policy divergence between the European Central Bank and Federal Reserve. Different policy paths could continue driving currency movements and affect relative investment returns across regions.

The 6.94% euro appreciation over the past 12 months [1] demonstrates how currency movements can substantially affect investment outcomes.

The current market environment shows elevated volatility, with SPY experiencing a 1.08% decline in the latest session [0]. Short-term currency and market timing risks remain elevated, suggesting careful consideration of entry points and allocation timing.

While the S&P 500 has historically outperformed over long periods [5], the current year’s underperformance relative to European indices highlights the importance of geographic diversification and currency risk management in portfolio construction.

Different policy trajectories could create additional currency volatility and impact relative investment returns across regions.

The S&P 500 denominated in euros shows positive returns across all measured timeframes, with 1-year performance of 14.24% annualized [2] and confirmed positive YTD returns. However, euro strength against the dollar (6.94% appreciation over 12 months [1]) has created relative underperformance versus USD terms. European alternatives like STOXX Europe 600 have delivered superior 2025 performance at approximately 16.40% YTD [4], though the S&P 500 maintains long-term advantages with 11.02% CAGR over 33 years in euro terms [5]. Current market conditions show SPY at $670.23 with recent volatility [0], while forward forecasts suggest potential continued euro strength through 2026 [6].