are all nisa stocks active mutual funds?

[nisanewbie]

I have been using MUFG for my NISA account and with my limited Japanese I was told that all stocks that MUFG provide are active mutual funds. I was hoping to build a passive income but not sure if this is happening under active mutual funds as much as I would have liked. I am planning on changing to rakuten but does anyone know if all nisa stock are active mutual funds? I would like to invest in index funds.

[Haystack]

I have been using MUFG for my NISA account and with my limited Japanese I was told that all stocks that MUFG provide are active mutual funds. I was hoping to build a passive income but not sure if this is happening under active mutual funds as much as I would have liked. I am planning on changing to rakuten but does anyone know if all nisa stock are active mutual funds? I would like to invest in index funds.

Rakuten, Monex, and SBI are generally recommended. It is best to avoid having a NISA at a bank due to the lack of choices and associated fees.

There are index options with MUFG though, iFree S＆P 500インデックス……米国の代表銘柄に幅広く投資 for example. But the fees are high for an SP500 fund.

iFree S＆P 500インデックスは米国株式に投資し、「S＆P500指数（円ベース）」に連動する投資成果をめざして運用を行うインデックスファンド。運用は大和アセットマネジメントが行う。信託報酬は年率0.2475％（税込）。

[Tkydon]

I have been using MUFG for my NISA account and with my limited Japanese I was told that all stocks that MUFG provide are active mutual funds. I was hoping to build a passive income but not sure if this is happening under active mutual funds as much as I would have liked. I am planning on changing to rakuten but does anyone know if all nisa stock are active mutual funds? I would like to invest in index funds.

The simple answer is no, but it depends on the Fund Line-Up offered by your NISA Provider.
Certainly, MUFG does sell Passive Index Funds, but I don't know if they have them in their NISA Fund Line-Up.

I think you are confusing two things, which happen to use the same word, but are different things.

The First Meaning:

An 'Active Mutual Fund' is any Mutual Fund run by an Investment Management Company (Manager) that has the role of selecting the underlying instruments in which to invest the funds, with the objective of maximizing returns for the investor, for which the Investor usually pays a 'Load' or Entry Fee 購入時手数料 on the way in as a percentage of the amount invested, and a Yearly Management Fee 信託財産留保額 for the services of the Manager as a percentage of the Asset Value every year, regardless of whether they actually make a profit or a loss for the investor.
Typically, the fees for Active Mutual Funds might be in the range of 1% to 3.5% Load 購入時手数料, and 1% to 2.5% Annual Management Fee 信託財産留保額.
This is like a tax on your savings, significantly impacting your potential gains, and for that reason, these Active Mutual Funds are not popular with people in the know.
The Manager will claim that through Active Management, they are able to generate superior returns for their investors. This is debatable, and many are not able to consistently beat the Market Indices that they are Base-Lined against. One year of great returns is very often not repeated.

On the other hand, (the first meaning) a 'Passive Index Fund' is any Mutual Fund run by an Investment Management Company (Manager), but where the underlying instruments in which the funds are invested exactly match the composition of the Index that it aims to replicate. There is no role for the Manager in managing the instruments in the fund, as this is dictated by the composition of the Index itself. The Passive Index Fund will therefore achieve exactly the same returns for the investor as the underlying Index on which it is based, which Managed Funds are trying, but often failing, to beat.
For the reduced role of the Manager, the Investor usually pays 'No Load' or Entry Fee 購入時手数料無料 on the way in, and a significantly lower Yearly Management Fee 信託財産留保額 for the reduced services of the Manager as a percentage of the Asset Value every year.
Typically, the fees for Passive Index Funds might be in the range of 0% Load (No-Load 購入時手数料無料) or very low Load around 1%, and 0.2% to 1% Annual Management Fee 信託財産留保額.
This significantly reduces the impact of the fees on your potential gains, and for that reason, these Passive Index Funds are very popular with people in the know.

By definition, the role of the Manager is 'Passive' for any 'Index Funds', and these are marketed under these Labels and Brands:

インデックス
インデックス型
ノーロード
購入時手数料無料

eMAXIS Slim
Asset Management One No-Load
SMT
iFree
Tawara / OneTawara / たわら
etc.


The Second and completely separate meaning:

'Passive Income' refers to Income that is earned for you by your Money and Assets, that you don't have to actively work for yourself.
This 'Passive Income' might be in following forms:
Interest
Dividends
Profits from Businesses
Rental Income from Real Estate
Capital Gains from Investments
Forestry Income
Other or Miscellaneous Income such as Royalties from Music or other sources
Pension Income

but Not employment income or business income that you have to actually work for.


Some Mutual Funds pay out Dividends that they receive from the underlying instruments that the funds are invested in.
The Fund might state something like 1年決算型, 年４回決算型 or 毎月決算型, annual, quarterly or monthly settlement, and 毎月分配型, etc., annual, quarterly or monthly distribution.

Others keep any dividends or interest within the Mutual Fund and reinvest them to increase the future return to the investor.

'Passive Income' would come in the form of Capital Gains when selling the Mutual Funds.

If the Mutual Funds were held in a Tax Advantaged Investment Vehicle such as an iDECO, 401k, Tsumitate NISA, etc., then the 'Passive Income' might come in the form of a Retirement Lump Sum at the end of the contract, or as regular Pension Payments from an Annuity purchased with the proceeds from the Mutual Funds, etc..

Hopefully, Passive Index Funds will build a bigger future Net Worth than Actively Managed Mutual Funds, but you won't know until after the fact...


I hope that makes it a little clearer for you.

[mighty58]

You're confusing the meaning of several key terms, which in turn is likely leading to more confusion. Let's try to sort this out a bit:

I was told that all stocks that MUFG provide are active mutual funds.

Two things here, first, it should be: ...all "choices" that MUFG provide, not "stocks". The word "stocks" generally refers to shares of individual companies, which you cannot buy in Tsumitate NISA. Second, all of your choices are indeed limited to mutual funds, but not all are "active" funds. There are several passively-managed index funds that you can choose from.
As long as you buy an equity fund (regardless of whether it's active or passive) you will be owning stocks at the end of the day.

I was hoping to build a passive income but not sure if this is happening under active mutual funds as much as I would have liked.

Passive "income", as opposed to passively managed funds, refers to income you get on a periodic basis from your investments... ie. from dividends or (in real estate) rental income. Passively managed funds (index funds that don't have a human fund manager making investment decisions) do NOT provide you with passive "income" in the form of dividends. That's not a problem, just a distinction that needs to be understood.

... does anyone know if all nisa stock are active mutual funds? I would like to invest in index funds.

Tsumitate NISA choices are always limited to mutual funds (both active and passive/index) regardless of which securities company you have an account at. However, places like Rakuten or Monex will give you a better selection of funds that are lower cost.

You are limited to one NISA account though, and I'm guessing it'll be quite the hassle to transfer things. If it proves too much, don't worry too much though, the MUFG developed world index available in their Tsumitate NISA has annual fees of 0.22%, and while you could likely shave 0.1% off that at Rakuten, at the end of the day it's 0.1% so not enough to be overly concerned about.

[Zoomtokyo]

My NISA is with MUFG. No, not all are active. In fact, all my holdings are index funds through eMaxis and eMaxis Slim.

The most popular emaxis products are available: SP500 and All Country. I also have a Dow, US Reit and J-Reit, Developed Country Bonds, Developing Country Bonds. That's enough for me!

The selection isnt as extensive as with the brokerages but it should be sufficient for a retirement nestegg, and if you're not an ambitious risk-taking investor. The UI and trading procedures are pretty straightforward for a Japanese platform.