Japan-based low-fee global index fund?

[adamu]

Have you thought about non-US ETFs? In particular Ireland/Luxembourg domiciled ETFs are often recommended by bogleheads forum (https://www.bogleheads.org/forum/viewtopic.php?t=153389) for non US investors as they 1) Have no dividend withholding tax, 2) Accumulate dividends and 3) Avoid the very large inheritance tax liability of US based ETFs.

For example IWDA.L tracks a similar index to VT, it has an ER of 0.2% and reinvests dividends before tax. So I think it would beat the JP domiciled fund (0.08% lower ER but otherwise identical) but not by so much, 1-2% over 20-30 years.

Interesting! How to buy these in Japan though?

Yes this would be perfect, and I did something similar when I lived in the UK, but unfortunately I don't think any of the Japanese budget brokers offer European markets. I don't know why, maybe not enough demand? SBI only has US and Asian ones. You can use a traditional broker but then the transaction fees involved are prohibitively expensive.

[RetireJapan]

Yes this would be perfect, and I did something similar when I lived in the UK, but unfortunately I don't think any of the Japanese budget brokers offer European markets. I don't know why, maybe not enough demand? SBI only has US and Asian ones. You can use a traditional broker but then the transaction fees involved are prohibitively expensive.

I'm guessing Interactive Brokers has them, but can they be bought in a NISA or tax-reporting account anywhere?

[fools_gold]

Yes this would be perfect, and I did something similar when I lived in the UK, but unfortunately I don't think any of the Japanese budget brokers offer European markets. I don't know why, maybe not enough demand? SBI only has US and Asian ones. You can use a traditional broker but then the transaction fees involved are prohibitively expensive.

I'm guessing Interactive Brokers has them, but can they be bought in a NISA or tax-reporting account anywhere?

Deutsche Bank do a series of Ireland domiciled ETFs which reinvest dividends. They're also available on the Singapore stock exchange, which you can access through SBI. As far as I know, dividends in Singapore aren't subject to a withholding tax. Don't think I'll be bothering. Sounds like far too much trouble to me!

[anjin]

Yes this would be perfect, and I did something similar when I lived in the UK, but unfortunately I don't think any of the Japanese budget brokers offer European markets. I don't know why, maybe not enough demand? SBI only has US and Asian ones. You can use a traditional broker but then the transaction fees involved are prohibitively expensive.

I'm guessing Interactive Brokers has them, but can they be bought in a NISA or tax-reporting account anywhere?

Ah I didn't realise the discount brokers don't have European exchanges, you're probably right about not enough demand. Yep, Interactive Brokers is where I buy them.

[adamu]

I'm really dragging my feet with this. I've still not made a decision but I've reaffirmed I would like a domestically domiciled global fund that reinvests dividends, mostly thanks to jcc's research. I think I'm ruling out the Rakuten Vanguard wrapper or EXE-i equivalent for now because they come will all the bad tax stuff plus more fees (although does remove the currency problem). Maybe I'll have to compromise and pick up ex-Japan and Japan funds like many others do. I'm trying to keep things as simple as possible though, and doing that means new temptations for playing around with bonds, real estate, emerging markets...

[RetireJapan]

Emerging markets FTW!

[adamu]

Emerging markets FTW!

Well two of the top three cheapest funds from the 3rd post of this thread (Rakuten's Vanguard ETF wrapper and EXE-i つみたてグローバル（中小型含む）株式 which is a Schwab ETF wrapper) include developing markets. I like the simplicity of keeping everything in one fund and also being based on a global index calculated by people and algorithms far cleverer than me.

In the end I put the last few thousand yen of my NISA into EXE-i つみたてグローバル（中小型含む）株式. I don't like the triple tax thing but it's denominated in yen and reinvests the dividends automatically (on SBI you can select whether you want to do this when you buy the fund), and it's cheaper than the Rakuten's offering. There doesn't seem to be a good domestic fund that buys the stocks itself - I suppose the costs of doing that can't beat simply wrapping the US ETF, at least in the short term. I'll keep my existing ETF holdings but probably go with EXE-i/Schwab for new investments.

Thanks everyone for all the interesting links, spreadsheets, and discussion.

[N00bster]

Great discussion. Could someone post a kind of tl;dr? What is the final opinion about the Rakuten VT wrap? How about Nissei, EXE-I and Tawara ex-Japan offerings?

[adamu]

Maybe RetireJapan can recruit jcc to summarise it all in a guest post for us. He seems to know what he's talking about.

[RetireJapan]

Sounds good to me!