Safety of large investments (and that 10 million yen guarantee thing)

[Mrblobby]

I know that money you have in a bank is guaranteed by the govt (if that is the right way to say it) up to 10 million yen per account, in the case the bank goes under.

I am wondering how safe a larger amount than that would be if invested in index funds using, for example, Rakuten Securities.

I have seen another topic that brushes the subject but then I found this which confuses me.

https://www.toushin.or.jp/investmenttru ... index.html

My Japanese is fairly good, though not specialised. But does that not say that all money in funds is safe --- no matter the amount --- even in the case of any of the component parts going bust?

結論から言えば、投資信託の仕組み上、仮に投資信託にたずさわる各機関が破綻したとしても、投資家が預けたお金は、投資額にかかわらず制度的に守られるようになっています。

Actually my local bank said a similar thing when I asked them (even though I am not using them as they charge large % to sign up!)

I'm keen to get a clear picture of all this in my head (as I will be having quite a bit over 10 million in Rakuten.... spread over a few different funds).

Thank you for any feedback! This learning process is very time consuming but I am on the road to getting there!

[Deep Blue]

Securities should be held in a named custodial account, quite separate from the broker. So the bankruptcy of the broker shouldn't touch the underlying assets.

[adamu]

viewtopic.php?p=17183

[Mrblobby]

viewtopic.php?p=17183

Thanks, but I saw that before I posted my question… and I don’t think it answers my question.

[adamu]

does that not say that all money in funds is safe --- no matter the amount --- even in the case of any of the component parts going bust?

It does indeed say that (except for the underlying assets losing value, of course), but I think it's over-optimistic for the reasons pointed out in the other thread. It's probably a tiny risk, but it's easily mitigated by maintaining accounts with multiple brokers

edit: Issues with the trust company is an interesting one I hadn't considered seriously before - that might require a few different funds as fools_gold pointed out.

[Mrblobby]

OK, thanks.

That site appears to be laying out rules, so I would have thought it were more than just being 'over-optimistic'. Surely there are actual and hard rules (?)

My local bank, when I went to meet with them to discuss these things, said the same: basically that investment would be safe even if any of the components crash and burn. (I feel a little bad not investing with them, but they wanted 1-3% sign-on charges for things that are 0 yen on Rakuten! Hmmmm, don't think so!!)

I'm not mad keen on the idea of having yet another account, would prefer to have it all within one.

[Tkydon]

OK, thanks.

That site appears to be laying out rules, so I would have thought it were more than just being 'over-optimistic'. Surely there are actual and hard rules (?)

My local bank, when I went to meet with them to discuss these things, said the same: basically that investment would be safe even if any of the components crash and burn. (I feel a little bad not investing with them, but they wanted 1-3% sign-on charges for things that are 0 yen on Rakuten! Hmmmm, don't think so!!)

I'm not mad keen on the idea of having yet another account, would prefer to have it all within one.

What's that old adage?

Safe, Low Cost, Unified... You can have any two out of three...

[Mrblobby]

Sorry, I don't understand that.