Switching from tsumitate NISA and if it's worth it

[tbsmj]

I would not extend this to the funds commonly recommended on this site: Emaxis Slim (All Country/Developed Countries and S&p500 funds) along with Rakuten-Vanguard products.

1. Rakuten Vanguard products invest in the American ETFs. It is harder to get safer than that. (VTI/VOO)

2. Emaxis Slim Products have a massive amount under management, track indexes that are well understood, and are managed by MUFJ the world's biggest bank outside of China. These are passive investments.

Now if you want to talk about active funds, ESG wraps, and the like. Absolutely, there is a huge risk.

The ETF I was referring to in the previous post was 1582, a passive iShares ETF tracking the MSCI Emerging IMI index (as all iShares product, managed by BlackRock, also no small fry in investment world). It was not by any means a fancy choice, just the passive ETF with the lowest ER at the time for emerging market equities. The reason it was liquidated was not mismanagement or otherwise; BlackRock just decided to introduce a new ETF lineup to TSE which was structured differently, and they closed all their previous Tokyo-traded iShares products to do so.

Are Emaxis Slim products and Rakuten wraps for Vanguard ETFs headed the same way? Unlikely I suppose, but I wouldn't be so sure that the risk is zero over a 20-year period.

[EmaxisSlim Cultist]

The ETF I was referring to in the previous post was 1582, a passive iShares ETF tracking the MSCI Emerging IMI index (as all iShares product, managed by BlackRock.

1582 was a JDR and not a true ETF or trust. Depository receipts are a suboptimal way to invest and come with added risk.

[Bushiman]

By contrast, in my opinion, the regular NISA is a much more risky proposition. 5 years of a bear market, and a poor fund/stock selection and you have wasted your allocation.

But have you?
Say I buy ¥1.2m of our favourite all-country fund... Then the next 5yrs there is huge bear market and the value goes way down... Can I not roll that over and top it up to however much to reach the ¥1.2m, and then when the market bounces back I'll have way more of the all-country fund within that NISA year earning tax free capital gains?
You can roll-over more than the ¥1.2m if your assets have increased in value, so can't you rollover if they've decreased then top it up to the ¥1.2m or am I mistaken?

[EmaxisSlim Cultist]

By contrast, in my opinion, the regular NISA is a much more risky proposition. 5 years of a bear market, and a poor fund/stock selection and you have wasted your allocation.

But have you?
Say I buy ¥1.2m of our favourite all-country fund... Then the next 5yrs there is huge bear market and the value goes way down... Can I not roll that over and top it up to however much to reach the ¥1.2m, and then when the market bounces back I'll have way more of the all-country fund within that NISA year earning tax free capital gains?
You can roll-over more than the ¥1.2m if your assets have increased in value, so can't you rollover if they've decreased then top it up to the ¥1.2m or am I mistaken?

I do not believe you can top-off a rollover.

[Bushiman]

By contrast, in my opinion, the regular NISA is a much more risky proposition. 5 years of a bear market, and a poor fund/stock selection and you have wasted your allocation.

But have you?
Say I buy ¥1.2m of our favourite all-country fund... Then the next 5yrs there is huge bear market and the value goes way down... Can I not roll that over and top it up to however much to reach the ¥1.2m, and then when the market bounces back I'll have way more of the all-country fund within that NISA year earning tax free capital gains?
You can roll-over more than the ¥1.2m if your assets have increased in value, so can't you rollover if they've decreased then top it up to the ¥1.2m or am I mistaken?

I do not believe you can top-off a rollover.

Huh... Balls. I thought you could...
From this page we get this information:



Doesn't the last sentence say that if the amount rolled over is ¥1.2m or more, no new investments will be possible? Thus suggesting that if the rolled-over amount is below ¥1.2m then you can make new investments within that allotted space i.e. topping up?

[EmaxisSlim Cultist]

But have you?
Say I buy ¥1.2m of our favourite all-country fund... Then the next 5yrs there is huge bear market and the value goes way down... Can I not roll that over and top it up to however much to reach the ¥1.2m, and then when the market bounces back I'll have way more of the all-country fund within that NISA year earning tax free capital gains?
You can roll-over more than the ¥1.2m if your assets have increased in value, so can't you rollover if they've decreased then top it up to the ¥1.2m or am I mistaken?

I do not believe you can top-off a rollover.

Huh... Balls. I thought you could...
From this page we get this information:



Doesn't the last sentence say that if the amount rolled over is ¥1.2m or more, no new investments will be possible? Thus suggesting that if the rolled-over amount is below ¥1.2m then you can make new investments within that allotted space i.e. topping up?

I'll wait for someone who knows more to pitch in. Adamu and Ben were not sure on the old 2018 post I just checked.

If you have the cash, lump sum is almost always better. However, unless your investing 1.2 million in January, I think tsumitate and taxable are a better option.

For me 1 choose iDeco 68,000, Tsumitate Nisa 33,333 and Tsumitate non-nisa 50,000. Instead of the 120,000 regular Nisa.

I am only middle to low-mid income level though.

[RetireJapan]

If you roll over less than the annual limit into ordinary NISA you can still use the remaining allocation as usual.

But I don't see how rolling over less than the allocation is any different from just investing new cash

The main benefit of the current rollover is being able to put more than 1.2m in a NISA account/year.

[Bushiman]

If you roll over less than the annual limit into ordinary NISA you can still use the remaining allocation as usual.

But I don't see how rolling over less than the allocation is any different from just investing new cash

The main benefit of the current rollover is being able to put more than 1.2m in a NISA account/year.

H'mmmm....

My question was could I top off my NISA year after a bear market...
Is the amount of money you put in during that NISA year the deciding factor on how much you can add after a rollover, or, the value of those investments at the deciding time whether to rollover or not?

For example, I invest ¥1.2m on JAN 1st 2022 in the all-country fund.
What follows is a huge 5yr bear market and the price plummets..............
My ¥1.2m of investments are only worth ¥500k now... Does that mean if I rollover I'll have ¥700k of free space for the new NISA year?

[RetireJapan]

Yes, the amount rolled over depends on the market value at the end of the year.

[zeroshiki]

If you roll over less than the annual limit into ordinary NISA you can still use the remaining allocation as usual.

But I don't see how rolling over less than the allocation is any different from just investing new cash

The main benefit of the current rollover is being able to put more than 1.2m in a NISA account/year.

H'mmmm....

My question was could I top off my NISA year after a bear market...
Is the amount of money you put in during that NISA year the deciding factor on how much you can add after a rollover, or, the value of those investments at the deciding time whether to rollover or not?

For example, I invest ¥1.2m on JAN 1st 2022 in the all-country fund.
What follows is a huge 5yr bear market and the price plummets..............
My ¥1.2m of investments are only worth ¥500k now... Does that mean if I rollover I'll have ¥700k of free space for the new NISA year?

In this situation, don't rollover. Buy a new 1.2M worth of NISA and send that 500k to tokutei or sell it to fund your new NISA.