Same index, different outcome

The surprise after ten years of investing

Bearry and Toroshi thought they were being smart.

Both had put $10,000 into an ETF that promised to track the S&P 500.

Same index, same idea, same start date.

Ten years later, they meet up to compare results.

Toroshi is grinning with his portfolio showing $26,000.

Bearry is confused: his account says $24,500.

How could that be? They both invested in the “same” thing.

Searching for the real difference

At first Bearry blames luck. Maybe Toroshi timed his entry better.

But when they check the dates, both orders were placed the same week.

Next theory: maybe the broker fees?

But the difference is too large to be explained by trading commissions alone.

So they dig deeper.

Toroshi’s ETF is a large, liquid fund with a low expense ratio and a replication method that directly holds the stocks in the index. Bearry’s ETF is a smaller fund that uses swaps and charges a slightly higher expense ratio.

Over ten years, those extra costs and tracking differences quietly shaved off part of his return.

Why fees and structure quietly compound

An expense ratio is the annual fee a provider charges for running the ETF.

It sounds tiny, like 0.1% versus 0.5%, but over time it compounds into a big gap.

You all know the feeling from games: you get poisoned, and the damage ticking down seems harmless at first. No panic. But before you realize it, half your HP is gone.

That is exactly how small yearly fees eat into long-term returns.

Replication method matters too. Some ETFs hold the actual stocks of the index.

Others use swaps or sampling, which can increase costs or tracking error.

It is like two phone plans with the same monthly cost.

One includes hidden data limits that slow you down after heavy use.

On day one both look identical, but over a year the gap in performance is clear.

Lesson unlocked

1. Two ETFs tracking the same index can deliver different results
2. Fees, structure and replication methods explain the gap
3. Checking under the hood avoids surprises years down the road

You have seen how Bearry and Toroshi uncovered why their “same” ETFs gave different results.

Test your knowledge in the quiz, then step into commodities, the crafting materials of real-world markets.