monex tokutei

[bryanc]

hi,

have filled my nisa quotas etc and looking to invest some more money -maybe just for a fewmonths til nisa can be filled again..
is the monex tokutei worth doing for a few months-or are there charges etc if i take out quickly? i understand also risk of investment going down

[Tsumitate Wrestler]

It depends....

If I planned to buy E maxis slim All country in 2025, and I had some spare cash now, I'd probably just buy the ETF tracker for MSCI ACWI in my taxable account and sell out of it in Late December. You can usually set a NIsa order in last few days of December to be executed when the market opens post new year.

You could do the same with a mutual fund, just mind the settlement time.

Others would recommend only buying if you didn't plan to sell, in order to "keep the discipline".

[bryanc]

Thanks..why do you recommend that one?

[Tsumitate Wrestler]

Thanks..why do you recommend that one?

Japanese mutual funds are a superior product for long-term investing. They allow you to setup and automatic investing plan, that reinvests dividends and does not cause unnecessary taxable events. They also allow you to easily create reliable cash flows in retirement with scheduled monthly sales.

However, they are inferior for anything in the short term due to settlement dates. This forum does not recommend short-term investing, however, my suggestion would allow you to maintain exposure to same underlying index with an ETF in a taxable account, and later, efficiently move to a mutual fund in a Nisa.

[bryanc]

cheers-i understand about the risks of short term investing ,but still think its a good thing to do rather than wait about for a few months...
are there entry/exit charges which would affect or just small enough not to worry about?

[Tsumitate Wrestler]

cheers-i understand about the risks of short term investing ,but still think its a good thing to do rather than wait about for a few months...
are there entry/exit charges which would affect or just small enough not to worry about?

With most big Sec firms major ETFs trade free. Monex should have a list.

ETFs also allow you to earn passive income from stock lending, and their dividends are not reinvested, rather they are paid out. Check the Ex-dividend date of the ETF.

Of course with a taxable account you will need to pay capital gains tax upon sale. Most taxable accounts are set to pay this fee automatically, but you can set things so the tax will be paid manually by the owner.

ETFs come with more risk, and a steeper learning curve. Buying at market for a liquid index should not be a big issue, but I always recommend limit orders when trading.

You can of course ignore all that noise, and just by the mutual fund.

[bryanc]

yes- i was thinking it might be too much for short term and not worth the risk..

stupid question incoming: these will be from my taxable account but does this go into my tokutei?or just standard acct?

(have this set so dont have to calculate,declare taxes etc)

reason for asking is if i try to put the money into the all country emax etc it comes up with the 特定as an option but not for the ETFs..
presume there is a simple explanation i am missing

[ToushiTime]

yes- i was thinking it might be too much for short term and not worth the risk..

stupid question incoming: these will be from my taxable account but does this go into my tokutei?or just standard acct?

(have this set so dont have to calculate,declare taxes etc)

reason for asking is if i try to put the money into the all country emax etc it comes up with the 特定as an option but not for the ETFs..
presume there is a simple explanation i am missing

Some ETFs listed in Japan track US and global stock indexes.
When buying ETFs listed in Japan, Monex gives me the choice of 一般 or 特定
When buying ETFs listed in the US using the 米国株かんたん注文 page, I am given no option. It just says 課税.

[captainspoke]

...
ETFs come with more risk, and a steeper learning curve. ...

How so, on both those points?

Eg, vanguard offers ETF versions of many of their mutual funds--they're friggin identical except for how they're structured legally, based on things like SEC rules and regulations--same holdings, same returns, same performance when looking at historical charts. The risk/return profiles are identical (morningstar ratings). So how is it that "ETFs come with more risk"? What am I missing?

Maybe you think there are ETFs that are "shady" in some way? Is that the 'learning curve' you're referring to? --there are also mutual funds with those same 'shady' characteristics that you have to be aware of. Or is it low volume that you need to learn about? --again, there are MFs with exceptionally low volume. Both MFs and ETFs occasionally close, that same thing can happen to both types of funds. So any learning curve there would be the same for each. (Probably since they're an older structure, it might be an easy bet that historically more MFs have closed down than have ETFs.)

And you say that:

I always recommend limit orders when trading.

So apart from MFs, which you seem to be characterizing as near perfect, I guess you do trade a sufficient number of stocks or ETFs (enough experience with those) that you can recommend limit orders? Why?

Even the ETF in 100th place (i.e., last place) on a list of the top 100 ETFs by volume, trades over 4 million shares a day. And that ETF in 100th place, SOXX, has a present share value of $224, meaning the value of a day's trades in that 100th place ETF is well over $896,000,000. Per day. And you could go up the list from there.

Could we compare that liquidity with any of the eMaxis funds? Pick one of the big ones in that family--how many shares are traded every day (3 month average), and what yen value does that volume of shares reflect?

[Tsumitate Wrestler]

...
ETFs come with more risk, and a steeper learning curve. ...

How so, on both those points?

Eg, vanguard offers ETF versions of many of their mutual funds--they're friggin identical except for how they're structured legally, based on things like SEC rules and regulations--same holdings, same returns, same performance when looking at historical charts. The risk/return profiles are identical (morningstar ratings). So how is it that "ETFs come with more risk"? What am I missing?

Maybe you think there are ETFs that are "shady" in some way? Is that the 'learning curve' you're referring to? --there are also mutual funds with those same 'shady' characteristics that you have to be aware of. Or is it low volume that you need to learn about? --again, there are MFs with exceptionally low volume. Both MFs and ETFs occasionally close, that same thing can happen to both types of funds. So any learning curve there would be the same for each. (Probably since they're an older structure, it might be an easy bet that historically more MFs have closed down than have ETFs.)

And you say that:

I always recommend limit orders when trading.

So apart from MFs, which you seem to be characterizing as near perfect, I guess you do trade a sufficient number of stocks or ETFs (enough experience with those) that you can recommend limit orders? Why?

Even the ETF in 100th place (i.e., last place) on a list of the top 100 ETFs by volume, trades over 4 million shares a day. And that ETF in 100th place, SOXX, has a present share value of $224, meaning the value of a day's trades in that 100th place ETF is well over $896,000,000. Per day. And you could go up the list from there.

Could we compare that liquidity with any of the eMaxis funds? Pick one of the big ones in that family--how many shares are traded every day (3 month average), and what yen value does that volume of shares reflect?

Japanese Mutual Funds

I have already made the case for the superiority of Japanese mutual funds above. Their simplicity is immediately evident to anyone who has experience purchasing both mutual funds and ETFs. With Japanese mutual funds, you only need to enter the purchase amount, without worrying about shares, lot sizes, or, in many cases, directly funding a securities account. In addition to the tax efficiency and simplicity, there are many fringe benefits, including point yields, the ability to purchase with credit cards, and earning credit card points.

These funds encourage better habits, as investors tend to avoid watching price fluctuations live. Instead, they can set up recurring monthly purchases in fixed currency amounts, which makes budgeting and planning easier.

ETFs

In contrast, purchasing American ETFs involves currency conversion and navigating foreign market hours. Japanese ETFs are relatively new, with lower liquidity. Many have issues related to lot purchase sizes and high share prices.

While limit orders allow for more precise purchases and help avoid issues with the spread, investors still have to deal with reinvesting dividends, tax inefficiencies, share sizes, and other nuisances, making ETFs more complex and less approachable for beginners.