Over the 36-year period, the compounded annual growth rate (CAGR) for the total return numbers is 8.3% in USD and 12.4% in ISK. For the price returns, it is 5.9% and 9.9%. So both exchange rate movements and total returns matter a lot, as can be seen more clearly in the two charts below.

The cumulative total return for the MSCI World Index over the 36-year period is 1.654% in US dollars and 6.712% in Icelandic kronas. In other words, a 100-unit invested at the end of 1987 was worth 1.754 dollars and 6.712 kronas at the end of last year (2023).

The cumulative price return for the MSCI World Index over the 36-year period is 677% in US dollars and 2.872% in Icelandic kronas. In other words, a 100-unit invested at the end of 1987 was worth 777 dollars and 2.972 kronas at the end of last year (2023).

Here using a more proper semi-log y-axis scale with base 10.

Compounded Annual Rates (CARs) using monthly data, with end of first quarter or March 2024 as latest value. The blue line shows the average over the period. The returns are annualized, as per industry standards, and all charts show the same type of y-axis scaling and the same maximum, minimum and interval levels for easier and proper comparison.

Compounded Annual Rates (CARs) using monthly data, with end of first quarter or March 2024 as latest value. The blue line shows the average over the period. The returns are annualized, as per industry standards, and all charts show the same type of y-axis scaling and the same maximum, minimum and interval levels for easier and proper comparison.

Compounded Annual Rates (CARs) using monthly data, with end of first quarter or March 2024 as latest value. The blue line shows the average over the period. The returns are annualized, as per industry standards, and all charts show the same type of y-axis scaling.

Compounded Annual Rates (CARs) using monthly data, with end of first quarter or March 2024 as latest value. The blue line shows the average over the period. The returns are annualized, as per industry standards, and all charts show the same type of y-axis scaling.

Here are the Index annual price returns in Icelandic kronas. In 26 years out of 36, the Index generated positive price returns in US dollars. If we convert the Index and express it in Icelandic kronas (ISK), then we get 26 positive and ten negative return years. Last year, the return of the Index in USD was 21.8%. However, over the same period the USD decreased 4.1% in value versus the ISK – resulting in a 16.8% positive return for the Index in ISK. 

The third chart shows the annual price returns in the context of the mean and the standard deviations. We have 19 years with above-average (blue line) returns, five years where the returns are more than one standard deviation above the mean and four years where the returns are more than one standard deviation below the mean. However, we have only two years (1988 and 1989) where the positive return is above two standard deviations and one year (2002) where the negative return is below two standard deviations.