Saison Global Balance Fund

[Owly]

Hello everyone,

I was wondering if someone wiser and more experienced than me has used or could give me some advice about this investment.

https://www.saison-am.co.jp/fund/global/

I have been investing in this fund for around 6 years now in an 一般 NISA shell. It used to be called "Vanguard Global Balance Fund" and consisted solely of Vanguard products. Actually I learned of it on this forum - someone suggested it as a possible good choice for beginners who don't know how to create a portfolio. Not sure why the name change - presumably non-Vanguard products are planned for the future.

It has done OK but not amazingly, and recently has lost some value. I've started to wonder whether it's a good choice or not. The fee is a little high at 0.45% and it is also a little bond heavy (I'm in my 40s). Most worryingly, I recently came across the issue of triple taxation, which seems to be an issue with this investment? https://retirewiki.jp/wiki/Japanese_global_index_funds

Should I cut my losses and get out now?

[TokyoBoglehead]

Hello everyone,

I was wondering if someone wiser and more experienced than me has used or could give me some advice about this investment.

https://www.saison-am.co.jp/fund/global/

I have been investing in this fund for around 6 years now in an 一般 NISA shell. It used to be called "Vanguard Global Balance Fund" and consisted solely of Vanguard products. Actually I learned of it on this forum - someone suggested it as a possible good choice for beginners who don't know how to create a portfolio. Not sure why the name change - presumably non-Vanguard products are planned for the future.

It has done OK but not amazingly, and recently has lost some value. I've started to wonder whether it's a good choice or not. The fee is a little high at 0.45% and it is also a little bond heavy (I'm in my 40s). Most worryingly, I recently came across the issue of triple taxation, which seems to be an issue with this investment? https://retirewiki.jp/wiki/Japanese_global_index_funds

Should I cut my losses and get out now?

The name changed because Vanguard pulled out of Japanese, but this does not affect the fund. Rakuten also still uses Vanguard funds but dropped the branding.

It's a conservative set and forget investment. The bond and stock market are in a downturn. Your should just ignore it and check back in a year or two.....

However, the management fee is more of a concern then the taxation issue.

Has your risk appetite changed?

Personally, I would still be 100% equities in my 40s, but with at least a years worth of savings at standard spending levels in yen.

[Owly]

Thanks for your reply.

My risk appetite has indeed changed - I was very nervous when starting out with investing. And like I said, the management fee bothers me also.

I guess I would wait until the end of the year to sell and then set up a new NISA with a broker for 2024 and invest the Y2 400 000 maximum in one go with 80% or more in stock index funds.

May I ask why you say the taxation is not much of an issue?

[TokyoBoglehead]

Thanks for your reply.

My risk appetite has indeed changed - I was very nervous when starting out with investing. And like I said, the management fee bothers me also.

I guess I would wait until the end of the year to sell and then set up a new NISA with a broker for 2024 and invest the Y2 400 000 maximum in one go with 80% or more in stock index funds.

May I ask why you say the taxation is not much of an issue?

The possible tax inefficiencies or a wrapped ETF are pretty meaningless in comparison to being so heavily invested in a fund that is half bonds, and has a massive fee.

It is like worrying about the inefficiency of your heater in your house but you have left the windows and doors open.

[captainspoke]

...
Personally, I would still be 100% equities in my 40s, but with at least a years worth of savings at standard spending levels in yen.

40s, 50s, or even later.

Now in my 70s, and tho I do hold significant cash here, I'm about 99% equities in what I think of as my investment account.

[Bubblegun]

We have used the Saison Global Vanguard Balance fund for years. Ever since our kids were born. So maybe I can put some actual real light on the returns we got. First, we put all the kid's child support money into the funds. We set it up way before the NISA system started because sticking it in the bank was useless. The wife's father did the research and came up with VANGUARD GLOBAL BALANCED FUND. I will say this for sure. This fund has performed better in a shorter time than my endowment did over 25 years which totaled about 5,500,000 yen.


First Saison account
I'm not sure when we started this. Maybe 2006ish
Total investment is around 3,500,000 yen
The total value was approximately 6,500,000 yen

The total return/profit is approximately 3,000,000 yen.
So that is approximately 3.94% annual return. ( haven't checked recently though) but that was the conversation I had with my wife.


The second account we started was in 2014 for me and we pay 10,000 yen per month into that.
Total investment of 1,775,000 yen.
The total value is 3,225,000 yen

Total return/profit is 1,450,000. So that is about a 6%+ annual return.


So I hope this helps with REAL figures and a real person with the same fund, who has gone through the 2008 financial crisis and is going through this bear market.

Concerning my NISA, I have an E-maxi S&P500 and am still down. I was dollar cost averaging a lot during the downturn. wow... I get what people say about emotion. MY NISA is Still down 200,000 yen.
Before everything went online, I was happy to pay, and go away. Happy as Larry! NOW! OMG!, We can check these things every day, and I'm struggling to keep my cool. I think Charlie Munger and Warren Buffet said this is just an emotional game. Everyone says I will reap the rewards later. If my last two Seison accounts are running a profit, I have to remind myself, to stop looking, and wait, and wait.

Saison Vanguard fund has been growing, and we have the EMAXIS S&P500 NISA. So maybe it's ok to let both run. One is for the USA and the other will pick up things from other countries when the USA doesn't do so well. But right now the Saison fund has been working its little bit of magic.

y Owly » Tue Mar 28, 2023 11:28 pm


I guess I would wait until the end of the year to sell and then set up a new NISA with a broker for 2024 and invest the Y2 400 000 maximum in one go with 80% or more in stock index funds

Is it really beneficial to sell, when you could keep the money in the saison global account,(especially if you're still contributing while prices are low) and just stop the allocation, then DCA the new NISA fund next year? Otherwise, if you sell up the Saison Fund, and move it into the NISA, you won't be able to add any more to the tax-efficient NISA fund if you're using the full allocation. Although I thought it was going to be unlimited from next year.

[TokyoBoglehead]

We have used the Saison Global Vanguard Balance fund for years. Ever since our kids were born. So maybe I can put some actual real light on the returns we got. First, we put all the kid's child support money into the funds. We set it up way before the NISA system started because sticking it in the bank was useless. The wife's father did the research and came up with VANGUARD GLOBAL BALANCED FUND. I will say this for sure. This fund has performed better in a shorter time than my endowment did over 25 years which totaled about 5,500,000 yen.


First Saison account
I'm not sure when we started this. Maybe 2006ish
Total investment is around 3,500,000 yen
The total value was approximately 6,500,000 yen

The total return/profit is approximately 3,000,000 yen.
So that is approximately 3.94% annual return. ( haven't checked recently though) but that was the conversation I had with my wife.


The second account we started was in 2014 for me and we pay 10,000 yen per month into that.
Total investment of 1,775,000 yen.
The total value is 3,225,000 yen

Total return/profit is 1,450,000. So that is about a 6%+ annual return.


So I hope this helps with REAL figures and a real person with the same fund, who has gone through the 2008 financial crisis and is going through this bear market.

Concerning my NISA, I have an E-maxi S&P500 and am still down. I was dollar cost averaging a lot during the downturn. wow... I get what people say about emotion. MY NISA is Still down 200,000 yen.
Before everything went online, I was happy to pay, and go away. Happy as Larry! NOW! OMG!, We can check these things every day, and I'm struggling to keep my cool. I think Charlie Munger and Warren Buffet said this is just an emotional game. Everyone says I will reap the rewards later. If my last two Seison accounts are running a profit, I have to remind myself, to stop looking, and wait, and wait.

Saison Vanguard fund has been growing, and we have the EMAXIS S&P500 NISA. So maybe it's ok to let both run. One is for the USA and the other will pick up things from other countries when the USA doesn't do so well. But right now the Saison fund has been working its little bit of magic.

y Owly » Tue Mar 28, 2023 11:28 pm


I guess I would wait until the end of the year to sell and then set up a new NISA with a broker for 2024 and invest the Y2 400 000 maximum in one go with 80% or more in stock index funds

Is it really beneficial to sell, when you could keep the money in the saison global account,(especially if you're still contributing while prices are low) and just stop the allocation, then DCA the new NISA fund next year? Otherwise, if you sell up the Saison Fund, and move it into the NISA, you won't be able to add any more to the tax-efficient NISA fund if you're using the full allocation. Although I thought it was going to be unlimited from next year.

Between January 2006-now the annualized returns of the S&P500 (Dividends reinvested) were 8.829%.

For comparison sake. The fund was a conservative choice and the lackluster return reflect this.

......

The fee is very high.

Assuming you started with $10,000 and invested $500 monthly for 30 years, you would end up paying around $40,000 in fees.

If you chose a low-cost fund at say .1%, you would only pay around $8,000 in fees.

*Forgive the dollars, it's just easier to process for me.

[Bubblegun]

We have used the Saison Global Vanguard Balance fund for years. Ever since our kids were born. So maybe I can put some actual real light on the returns we got. First, we put all the kid's child support money into the funds. We set it up way before the NISA system started because sticking it in the bank was useless. The wife's father did the research and came up with VANGUARD GLOBAL BALANCED FUND. I will say this for sure. This fund has performed better in a shorter time than my endowment did over 25 years which totaled about 5,500,000 yen.


First Saison account
I'm not sure when we started this. Maybe 2006ish
Total investment is around 3,500,000 yen
The total value was approximately 6,500,000 yen

The total return/profit is approximately 3,000,000 yen.
So that is approximately 3.94% annual return. ( haven't checked recently though) but that was the conversation I had with my wife.


The second account we started was in 2014 for me and we pay 10,000 yen per month into that.
Total investment of 1,775,000 yen.
The total value is 3,225,000 yen

Total return/profit is 1,450,000. So that is about a 6%+ annual return.


So I hope this helps with REAL figures and a real person with the same fund, who has gone through the 2008 financial crisis and is going through this bear market.

Concerning my NISA, I have an E-maxi S&P500 and am still down. I was dollar cost averaging a lot during the downturn. wow... I get what people say about emotion. MY NISA is Still down 200,000 yen.
Before everything went online, I was happy to pay, and go away. Happy as Larry! NOW! OMG!, We can check these things every day, and I'm struggling to keep my cool. I think Charlie Munger and Warren Buffet said this is just an emotional game. Everyone says I will reap the rewards later. If my last two Seison accounts are running a profit, I have to remind myself, to stop looking, and wait, and wait.

Saison Vanguard fund has been growing, and we have the EMAXIS S&P500 NISA. So maybe it's ok to let both run. One is for the USA and the other will pick up things from other countries when the USA doesn't do so well. But right now the Saison fund has been working its little bit of magic.

y Owly » Tue Mar 28, 2023 11:28 pm


I guess I would wait until the end of the year to sell and then set up a new NISA with a broker for 2024 and invest the Y2 400 000 maximum in one go with 80% or more in stock index funds

Is it really beneficial to sell, when you could keep the money in the saison global account,(especially if you're still contributing while prices are low) and just stop the allocation, then DCA the new NISA fund next year? Otherwise, if you sell up the Saison Fund, and move it into the NISA, you won't be able to add any more to the tax-efficient NISA fund if you're using the full allocation. Although I thought it was going to be unlimited from next year.

Between January 2006-now the annualized returns of the S&P500 (Dividends reinvested) were 8.829%.

For comparison sake. The fund was a conservative choice and the lackluster return reflect this.

......

The fee is very high.

Assuming you started with $10,000 and invested $500 monthly for 30 years, you would end up paying around $40,000 in fees.

If you chose a low-cost fund at say .1%, you would only pay around $8,000 in fees.

*Forgive the dollars, it's just easier to process for me.

Well, you are probably right but at that time, there wasn't any NISA, or IDECO, and the main purpose of this fund was to pay for Uni. At that time Vanguard was all the rage. And since my Japanese is about as good as say....... a toddler's. I'm not gonna rain on it. Yes, it could have done better. At the time I relied on my inlaws, and I personally wasn't able to make any comparisons. Sometimes it's not worth the fight. plus i didn't have the same knowledge I have now.
I think that is why I also went an ordered the S&P500.

So my next question would be...is it worth selling them, and putting the money into the Emaxi S&p500?

[beanhead]

Well, you are probably right but at that time, there wasn't any NISA, or IDECO, and the main purpose of this fund was to pay for Uni. At that time Vanguard was all the rage. And since my Japanese is about as good as say....... a toddler's. I'm not gonna rain on it. Yes, it could have done better. At the time I relied on my inlaws, and I personally wasn't able to make any comparisons. Sometimes it's not worth the fight. plus i didn't have the same knowledge I have now.
I think that is why I also went an ordered the S&P500.

So my next question would be...is it worth selling them, and putting the money into the Emaxi S&p500?

We all have different attitudes to risk and different investing experiences.
Your experience is that this fund has done well for you, whereas the S&P500 fund has not. As you said, it was all that was available, so you did what you needed to do to take care of your family.
If your S&P500 investment is fairly recent, then poor performance can be explained by the drop in value of most markets over the last couple of years. Many of us have seen the same fall in values. After around 2 years, my iDeCo is slightly negative.

Is it worth selling them? Only you can decide.
I would be inclined to initially move all new investment money to eMaxis Slim in the NISA. Once you trust that this is a good strategy for you, then maybe it makes sense to sell the other funds to add to your NISA.

*New NISA is not unlimited. You will be able to invest 3.6M yen per year, up to a maximum of 18M per person in the NISA account.

[sutebayashi]

Well, you are probably right but at that time, there wasn't any NISA, or IDECO, and the main purpose of this fund was to pay for Uni.

The results you got so far sound better than a nasty gakushi hoken product that I was made to pay into.

I guess your kids may be getting close to uni age now too, so if that money is gonna pay for it then bond heavy seems like a decent idea for that purpose.

So my next question would be...is it worth selling them, and putting the money into the Emaxi S&p500?

Depends on the purpose of the funds, I’d say. If you would hold the S&P 500 fund for a decade or more, I’d guess it’ll probably make some kind of positive return, but for shorter time frames there is higher risk of being underwater, so a lower return, lower risk fund seems prudent in that case.