Rakuten advice (first time Ideco)

[RetireJapan]

Switching iDeCo providers takes several months and you can't make contributions during that time.

Probably not worth it for 0.04% or whatever.

[beanhead]

Switching iDeCo providers takes several months and you can't make contributions during that time.
Probably not worth it for 0.04% or whatever.

Unless the poster is, say, 30 years old and contributing 68,000 a month.
With 30 or 35 years left to contribute, it may make sense.

[TBS]

Switching iDeCo providers takes several months and you can't make contributions during that time.
Probably not worth it for 0.04% or whatever.

Unless the poster is, say, 30 years old and contributing 68,000 a month.
With 30 or 35 years left to contribute, it may make sense.

The difference for Rakuten's VT wrap to eMaxis Slim is more like 0.22% now. The effective fee difference is ~0.14% and the tax inefficiencies of Rakuten's VT is minus another ~0.08%. A very rough calculation using those figures puts the payback time of switching iDeco provider from Rakuten to Monex at 10 to 15 years.

I assumed it takes 3 months to switch. It is hard to present an exact figure, as the outcome depends on the preexisting value of the iDeco, how much the future monthly payments will be, and unknowable factors like how long the money will be out of the market for during the switch.

The Tawara developed market fund in Rakuten's iDeco is not so bad however, it only lags eMaxis Slim by 0.04%. At that level of cost difference it is probably not worth switching like you say.

[RetireJapan]

Switching iDeCo providers takes several months and you can't make contributions during that time.
Probably not worth it for 0.04% or whatever.

Unless the poster is, say, 30 years old and contributing 68,000 a month.
With 30 or 35 years left to contribute, it may make sense.

The difference for Rakuten's VT wrap to eMaxis Slim is more like 0.22% now. The effective fee difference is ~0.14% and the tax inefficiencies of Rakuten's VT is minus another ~0.08%. A very rough calculation using those figures puts the payback time of switching iDeco provider from Rakuten to Monex at 10 to 15 years.

I assumed it takes 3 months to switch. It is hard to present an exact figure, as the outcome depends on the preexisting value of the iDeco, how much the future monthly payments will be, and unknowable factors like how long the money will be out of the market for during the switch.

The Tawara developed market fund in Rakuten's iDeco is not so bad however, it only lags eMaxis Slim by 0.04%. At that level of cost difference it is probably not worth switching like you say.

I actually switched to Tawara a few months ago for the fee savings. iDeCo is a small part of my holdings, so I don't mind it just being developed as I get the all-world in NISA and taxable accounts

[TBS]

I actually switched to Tawara a few months ago for the fee savings. iDeCo is a small part of my holdings, so I don't mind it just being developed as I get the all-world in NISA and taxable accounts

Nice - the Rakuten VT fund is the ugly ducking of the funds here. For various reasons it has also been lagging more than that 0.22% figure over recent years.

[adamu]

It's funny how initial impressions turned out to be correct (so far).

Rakuten's fund just looked like a money grab. Inefficient lazy design, initially adding more fees than vanguard for almost no added value, seems to lag the benchmark. It's still very successful, though. I'm guessing because of brand value and in the big picture it's not a bad option compared to a closet tracker actively managed fund.

eMaxis Slim all country genuinely tries to track the benchmark, actually invests in the underlying stocks rather than just wrapping up US ETFs, promises to be the industry leader with low fees, actually is the industry leader due to this, and has so far stuck to the promise even when Tracers came along and started playing accounting games to claim a lower headline fee than the real one.

Of course it would be even better if someone like Bogle could come along and make an organization that genuinely exists for the benefit of the fund investors rather than the fund mangers. I'm not even sure if that's possible in Japan.

End thread hijack. On topic: maybe we should have slightly stronger messaging to reconsider going with Rakuten for iDeCo than others due to the poorer funds. On the wiki iDeCo page I did write that there's no benefit of choosing the same broker for iDeCo as your other stuff, but maybe need to be clearer that the iDeCo fund lineup is important, and what to look for.

[mcpaullibra]

I'm sure I saw it somewhere but can't find it now, the thread on what funds to choose in Rakuten iDeCo. Would appreciate some guidance on this. I started contributing around May this year (on the 12,000yen band)- 80% U.S and 20% Japan funds. I'd like to know what the cool guys are doing Thanks in advance.

[beanhead]

I'm sure I saw it somewhere but can't find it now, the thread on what funds to choose in Rakuten iDeCo. Would appreciate some guidance on this. I started contributing around May this year (on the 12,000yen band)- 80% U.S and 20% Japan funds. I'd like to know what the cool guys are doing Thanks in advance.

Not a recommendation, and not a cool guy, but mine is 100% Tawara Developed market equity no-load.
23,000yen per month.
I messed about a bit with the developing market fund at first but then gave up that idea.

[Butterball]

I'm sure I saw it somewhere but can't find it now, the thread on what funds to choose in Rakuten iDeCo. Would appreciate some guidance on this. I started contributing around May this year (on the 12,000yen band)- 80% U.S and 20% Japan funds. I'd like to know what the cool guys are doing Thanks in advance.

Also mostly たわらノーロード 先進国株式. Some たわらノーロード 日経225 for Japanese exposure. Honestly, just those two, maybe in a 90/10 mix, would be great, and I know many would question having Japanese exposure at all.

However, I do have a mix of other things in mine as I've always thought the ability to rebalance in iDeco without triggering a tax event could be a nice advantage if something goes funky with the markets. Hasn't really happened so far and I've probably left a bit of growth on the table because of it, but I like sticking to a plan.

I'm also not cool, but my mix is:

たわらノーロード 先進国株式 84 %
楽天・プラス・Ｓ＆Ｐ５００インデックス・ファンド 3 %
たわらノーロード 日経225 3 %
三井住友・DCつみたてNISA・日本株インデックスファンド 3 %
たわらノーロード 先進国債券 3 %
ステートストリート・ゴールドファンド（為替ヘッジあり） 3 %
たわらノーロード 国内債券 1 %