We're not the only ones that like eMaxis Slim all-country

[RetireJapan]

So do Japanese financial bloggers

http://fundoftheyear.jp/2020/

[seb]

"we like the fund!"

e-Maxis also in 6th to 9th place, so 5 of the top 10 spots.

[adamu]

Interesting that Nissei foreign stock index beat VT to come in second place. Looks like that one slipped under the radar - would be worth comparing it to the emaxis slim global fund. The reviewers say that it's responsible for driving lower costs in the industry so I'll definitely be giving it a closer look.

Also worth noticing that the Rakuten fund that wraps VT is down at 18, whereas VT itself is #3. SBI's global offering didn't make the top 20 at all.

Nice lineup. I was looking for some commentary on the results, rather than just "we voted and here's the result". Turns out there are individual pages explaining in detail. Here's the all country page (google translated. "Freshly picked NISA" means Tsumitate NISA )

https://vvab6jcrhnus5cc5vysimpsvbu-adwh ... m-ufj.html

[Gareth]

I'm still very much in the learning phase when it comes to which funds are best, so do forgive me if this is a daft question. My application to join iDeCo with Monex is currently being processed so haven't finalised my choices yet.

When I look at the iDeCo page for Monex https://info.monex.co.jp/ideco/products/ranking.html, this ranking comes up:

It puts the eMaxis Slim all-country in 5th place below One DC in 4th (domestic shares) and the UFJ one in 3rd (domestic bonds).

What am I to read into this?

[adamu]

this ranking comes up

That is the ranking by popularity of Monex customers. Just because it's popular doesn't necessarily mean it's the best.

My guess is that many people still feel they can make clever picks, and would rather take a shot at balancing developed / domestic / emerging markets themselves. Or that they feel like sticking to developed markets are more reassuring. That probably explains why the top two funds are US and Developed Markets. Of course, this is just a guess. I think eMaxis slim or equivalent will become mainstream in the next two years as education catches up and people understand the benefits of low cost, diversification, and simplicity.

#1 has the lowest cost. That's definitely something good going for it. Personally I don't feel comfortable on relying solely on the US to drive the global economy, and my savings - who knows what will happen in the future.

[seb]

Nice lineup. I was looking for some commentary on the results, rather than just "we voted and here's the result". Turns out there are individual pages explaining in detail. Here's the all country page (google translated. "Freshly picked NISA" means Tsumitate NISA )

https://vvab6jcrhnus5cc5vysimpsvbu-adwh ... m-ufj.html

I think those are a list of comments left by people who voted. That would explain the repetitiveness and the length.

[bryanc]

this may be a silly question so apologies in advance-but what are the disadvantages or otherwise of investing in the emaxis slim outwith the ideco?
(ie lump sum) -i understand about the taxes,is their anything else? and regarding the taxes-how is this taken on profit and at what rate??
sorry if this is too newbie

[Moneymatters]

this may be a silly question so apologies in advance-but what are the disadvantages or otherwise of investing in the emaxis slim outwith the ideco?
(ie lump sum) -i understand about the taxes,is their anything else? and regarding the taxes-how is this taken on profit and at what rate??
sorry if this is too newbie

It's important to understand the systems.

NISA You invest with your net income/savings.
There is no captial gains tax on any profits earnt whilst the investments were growing in a valid NISA account.

iDeCo You make the investment from your Gross income thus avoiding Income tax!
So when you come to cash out after 60 this needs to be treated as income and exposed to income tax.
But with a wild calculation based on how long you invested, your birth stone and then the remaining taxable amount is halved for the purpose of the income tax calculation. It can be drawn lump sum or annually. Most people don't end up paying much income tax when it's time to cash out.

Anything Else Such as your lump going into a taxable trading account with Rakuten/SBI, etc. You invest with your net income/savings.
When you eventually sell your investments at a higher price to hopefully realise capital gains you are exposed to approx 20% capital gains tax.
Simple calculation for a lump sum one time investment is, Amount sold for minus amount you invested. Capital gains is a profit tax for investments. So if your investment grows by $10K you'll need to pay $2K tax and keep $8K.
It's the same calculation if you just sell part of it.

Dividends can be considered income so watch out there!

I think you mentioned elsewhere you are nearly 50 so I would caution that you probably want to be able to wave goodbye to this money for 10 years to have the highest likelihood of a higher value when it's time to cash in your chips.
Maybe watching it closely the few years before you would want to cash out gradually selling or moving to another asset class as suits your needs.

The problem with iDeCo is the relatively low amounts most people can put into an iDeCo account each month/year. approx 23K yen per month for salaried worker and 60k+ yen per month for self employed. if you have a lump sum of $70K USD to invest I don't think iDeCo is suitable.
iDeCo is a self pension system you are expected to have contributed to over decades.


I hope I'm not confusing you. Just ignore me if I am. Someone far more capable will be along soon enough!

[bryanc]

thanks-this has made it very clear..i understand now...thanks for being so patient..
happy to say goodbye to the money for 10yrs.. however its either invest in this as a lump sum or payoff the house mortgage..(which would mean gone for ever but out of debt!)
understand ideco is separate and would invest separately-is it not worth investing for 10yrs or so??

one issue that came up on here-is when to cash out?you can hold it but not invest more for 5yrs after it finishes..and choose a high point to exit on..
is that correct?
once again thanks

[Moneymatters]

thanks-this has made it very clear..i understand now...thanks for being so patient..
happy to say goodbye to the money for 10yrs.. however its either invest in this as a lump sum or payoff the house mortgage..(which would mean gone for ever but out of debt!)
understand ideco is separate and would invest separately-is it not worth investing for 10yrs or so??

one issue that came up on here-is when to cash out?you can hold it but not invest more for 5yrs after it finishes..and choose a high point to exit on..
is that correct?
once again thanks

Paying off the mortgage when it's an option is a personal preference. So whatever helps you sleep best at night.

ideco is separate and would invest separately-is it not worth investing for 10yrs or so??

I started ideco at 50.
I'm not bothered about how much these investment might grow. I just like to avoid income tax.
I should add I'm in a high income tax bracket so I benefit considerably even with an annual limit of 276,000. And still paying "some" income tax when I do cash in the iDeCo pot.

one issue that came up on here-is when to cash out? you can hold it but not invest more for 5yrs after it finishes..and choose a high point to exit on..
is that correct?

I think that's broadly correct but there are variations. If you chose to withdraw as a pension for example. And remember, you can "switch" or balance the investments in your iDeCo as you approach withdrawal time to put them somewhere safer. You don't need to hope there's isn't a crash around the time you'll cash out.

Anyway, I think you should use iDeCo as soon as you can to avoid income tax whilst taking time to understand the various investment vehicles available inside an iDeCo account.

Then slowly plan for withdrawal that factors in, what age you will work, hence how much will be in the pot and what other income you might combine with iDeCo withdrawals on any given year. As any "income" will be combined for the final income tax calculation.

(I should point out, possible to little surprise. I'm actually not a certified financial advisor. I'm not even allowed out past 8pm!)