Absolute beginner question RE Nissay DC fund allocation

[david]

First post! This is all very new to me, so as a little background, Im from the UK, 46 years old and planning to retire in Japan (obviously!) and have been here since about 2000. This year my company switched from a corporate pension fund to a DC plan managed by Nissay, partly due to me and my line manager both being away during most of the transition and having to do a whole bunch of paper work related to the change over which was a bit over my head I didnt really understand or put much thought into the fund alloction. So I put the money I had in the pension (about 1.4 million yen) into the following funds

40 % 預金（元本確保型） 三菱ＵＦＪ銀行確定拠出年金専用５年定期預金
40 % 保険（元本確保型） ニッセイ利率保証年金（１０年保証プラス／日々設定）
20 % バランス型 ＤＣニッセイワールドセレクトファンド（安定型）

But have been reading a little and this seems like a very conservative approach as I am 20 odd years off retirment. I have a UK pension I have kept up payments on and I also have NISA ive just started and an IDECO application on the way through rakuten (might have questions about those later in another thread) so the DC fund isnt my only pension so I am totally open to some higher risk more long term products, does anyone have any experience with Nissay DC funds or would it be appropriate to post a list of options and could someone guide me through it a little? Sorry its all a bit bewlidering!

If its important, my company doesnt allow extra contributions to the DC fund at the moment hence me opening the IDECO. Thanks in advance for any help!

[RetireJapan]

Hi David

Welcome to the forum! Yes, those funds seem very conservative and while they are likely to see less volatility, they are also not likely to grow as much as you might like over the next twenty years

I would generally recommend someone in your situation consider a low cost global (or developed country) fund for a tax-advantaged account like this. Do feel free to post the list of funds available or a link to the lineup -this will help people give feedback on your options.

[david]

Thakns very much! The fund list is very kind of verbose, so I will edit it down a bit and post it in the next day or two.

[david]

Here are the funds, again pretty our of my depth here! Thank you all in advance for any help.

預金（元本確保型）
三菱ＵＦＪ銀行確定拠出年金専用５年定期預金

保険（元本確保型）
ニッセイ利率保証年金（１０年保証プラス／日々設定）

The below funds all have the following information available if its helpful

--------------------------------------------------------------------------
商 品 名 / 基準価額 / 累計リターン(％) / 信託報酬(％) / 信託財産
運用会社名 / 基準価額(円)/前日比(円)
--------------------------------------------------------------------------

国内債券型
日興インデックスファンド日本債券（ＤＣ専用）


外国債券型
野村ＤＣ外国債券インデックスファンド
日興インデックスファンド海外新興国債券（１年決算型）


国内株式型
ＤＣニッセイ日経２２５インデックスファンドＢ
ニッセイ日本株ファンド
日興年金積立Ｊグロース
ひふみ年金


外国株式型
ＤＣニッセイ外国株式インデックス
ｉＦｒｅｅＮＹダウ・インデックス
ＤＣニッセイ新興国株式インデックス
大和住銀ＤＣ海外株式アクティブファンド
ＤＣニッセイグローバルＥＳＧフォーカスファンド
フィデリティ世界割安成長株投信（ＤＣ）「テンバガーハンター」

バランス型
ＤＣニッセイワールドセレクトファンド（安定型）
ＤＣニッセイワールドセレクトファンド（債券重視型）
ＤＣニッセイワールドセレクトファンド（標準型）
ＤＣニッセイワールドセレクトファンド（株式重視型）
ＤＣニッセイターゲットデートファンド２０３０
ＤＣニッセイターゲットデートファンド２０３５
ＤＣニッセイターゲットデートファンド２０４０
ＤＣニッセイターゲットデートファンド２０４５
ＤＣニッセイターゲットデートファンド２０５０
ＤＣニッセイターゲットデートファンド２０５５
ＤＣニッセイターゲットデートファンド２０６０
ＤＣニッセイターゲットデートファンド２０６５
投資のソムリエ（ＤＣ年金）リスク抑制型

[adamu]

国内株式型
ニッセイ日本株ファンド

外国株式型
ＤＣニッセイ外国株式インデックス
ＤＣニッセイ新興国株式インデックス

I would go for these three funds, they represent roughly all the large to mid size companies you can buy in the world by combining Japan, Developed Countries, and Emerging markets to approximate the MSCI All Country World Index.

A single fund that does that for you would be better, but according to that link, 6-7% Japan, 11-12% emerging markets, the rest in the gaikoku fund is a good approximation.

Alternatively the ＤＣニッセイワールドセレクトファンド（株式重視型）doesn't look bad if you want a single fund solution. It's 25% bonds/75% stocks (balanced globally like the 3-fund selection above) and built from passive index funds. It has a much heavier Japan bias, though (40% Japanese stocks...) so I'd probably stick with the 3 fund selection above.

[sutebayashi]

If you did want to have some foreign bonds, then this would be the developed economies one:

外国債券型
野村ＤＣ外国債券インデックスファンド

Not as growthy / risky as the equities ones, but should be steadier - this should be mostly us government debt and other reputable sovereign debt. If you have a 20 year horizon though, like adamu says.

[goran]

My company also has DC with Nissay. They call it 401k, for some reason.
Here's my division, for reference.

Edit: I just realized the asset choice for you and the ones that I have are different.
I just chose equity funds from foreign developed countries, Japan domestic, and emerging countries with lowest management fees on offer.
After may be 15-20 years, I plan to re-allocate them to bond funds.

[Tsumitate Wrestler]

My company also has DC with Nissay. They call it 401k, for some reason.
Here's my division, for reference.
Screenshot_20231110-111228.png

Edit: I just realized the asset choice for you and the ones that I have are different.
I just chose equity funds from foreign developed countries, Japan domestic, and emerging countries with lowest management fees on offer.
After may be 15-20 years, I plan to re-allocate them to bond funds.

You are probably aware of this, but that is a massive overweight of emerging markets, and Japan, and a huge underweight for developed markets.

The MSCI ACWI has for example->
Emerging - 10.39%
Japan - 5.49%
America - 62.65%[
Other Developed 21%

[goran]

My company also has DC with Nissay. They call it 401k, for some reason.
Here's my division, for reference.
Screenshot_20231110-111228.png

Edit: I just realized the asset choice for you and the ones that I have are different.
I just chose equity funds from foreign developed countries, Japan domestic, and emerging countries with lowest management fees on offer.
After may be 15-20 years, I plan to re-allocate them to bond funds.

You are probably aware of this, but that is a massive overweight of emerging markets, and Japan, and a huge underweight for developed markets.

The MSCI ACWI has for example->
Emerging - 10.39%
Japan - 5.49%
America - 62.65%[
Other Developed 21%

Thank you for pointing it out.
I wanted something closer to all country, at first. But then around the time I did this allocation, I got into a rabbit hole of how the coming decades will see the world economy moving towards South East Asia with its booming young economy and skimmed through them. And I was like "hmmm.. I won't need (have access) to this money until 30 years from now and my NISA is filled with all country, so why not?"
But may be at some point, I may put new additions to my DC account into a proportion heavier on developed market or bonds.

[Tsumitate Wrestler]

My company also has DC with Nissay. They call it 401k, for some reason.
Here's my division, for reference.
Screenshot_20231110-111228.png

Edit: I just realized the asset choice for you and the ones that I have are different.
I just chose equity funds from foreign developed countries, Japan domestic, and emerging countries with lowest management fees on offer.
After may be 15-20 years, I plan to re-allocate them to bond funds.

You are probably aware of this, but that is a massive overweight of emerging markets, and Japan, and a huge underweight for developed markets.

The MSCI ACWI has for example->
Emerging - 10.39%
Japan - 5.49%
America - 62.65%[
Other Developed 21%

Thank you for pointing it out.
I wanted something closer to all country, at first. But then around the time I did this allocation, I got into a rabbit hole of how the coming decades will see the world economy moving towards South East Asia with its booming young economy and skimmed through them. And I was like "hmmm.. I won't need (have access) to this money until 30 years from now and my NISA is filled with all country, so why not?"
But may be at some point, I may put new additions to my DC account into a proportion heavier on developed market or bonds.

I would recommend not trying to outperform a global index. Bonds are also not necessarily a "safe and neutral" choice for yen-based investors due to currency risk.

I would suggest a portfolio heavily biased toward developed country stocks.