iShares Core S&P 500 AUD ETF (ASX: IVV) investors benefitted from a third year of double-digit growth for US stocks in 2025.
The S&P 500 Index (SP: INX) soared 16.39% and delivered total returns, including dividends, of 17.88%, according to S&P Global.
But IVV ETF investors didn't see this level of returns.
Here's why.
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2025 returns for IVV ETF investors
IVV investors did not see 16% growth or 18% total returns because of the weakened US dollar against the Australian dollar last year.
The stronger Aussie dollar reduced returns in our currency from US stocks and the ASX exchange-traded funds (ETFs) tracking them.
The erosion is clear, with the IVV ETF rising 8.24% to $68.45 per unit, and delivering a total return of 10.13% in 2025.
The same impact was seen across all ASX ETFs tracking the S&P 500 without currency hedging.
The Aussie dollar rose from about 62 US cents in January 2025 to about 67 US cents by the end of the year.
The US dollar was weakened by US interest rate cuts and uncertainty over the impact of new tariffs on business growth and inflation.
If we compare IVV's performance to the ASX in local dollar terms, the IVV delivered superior capital growth but inferior total returns.
The S&P/ASX 200 Index (ASX: XJO) rose 6.8% in 2025 and produced total returns of 10.32% for investors.
The ASX IVV is a popular way for Aussie investors to gain geographical diversification in their investment portfolios.
Australians have certainly cottoned on to the trend of US stocks outperforming ASX shares every year since 2022.
This has led to substantial inflows into ETFs tracking US indices.
The latest ASX data shows the IVV ETF received a net $1,332.39 million inflow of funds from Aussie investors over the year to November.
By comparison, the most popular ASX ETF for investing in Australian shares, the Vanguard Australian Shares Index ETF (ASX: VAS), received a net inflow of $3,427.44 million.
Top 5 stocks in ASX IVV for share price growth
The following US stocks delivered the strongest capital growth for IVV ETF investors last year.
1. Flash memory designer and manufacturer Sandisk Corp (NASDAQ: SNDK), up 548%
2. Data storage company and hardware manufacturer, Western Digital Corp (NASDAQ: WDC), up 335%
3. Computer data storage company, Micron Technology Inc (NASDAQ: MU), up 222%
4. Global data storage solutions company, Seagate Technology Holdings PLC (NASDAQ: STX), up 220%
5. US stocks trading platform provider, Robinhood Markets Inc. (NASDAQ: HOOD), up 183%
Both Sandisk and Robinhood ascended into the S&P 500 index during the second half of the year.
