iDeCo performance

[Chris D]

I'd just like to check in about my fund choices for iDeCo. I created my account about a year ago and I have been trying to follow the advice of just letting it do its thing. I logged in only a couple of times just to make sure money was going where it was supposed to and nothing obviously weird was happening. Anyway, a year later I'm taking a look and the gain is not really what I would have expected. It seems to have been a stellar year for securities, at least based on my regular account so I was surprised to see the gains so low. See below:
ＤＣニッセイ日経２２５インデックスファンドＡ
ＥＸＥ－ｉ　先進国株式ファンド
ＥＸＥ－ｉ　新興国株式ファンド
ｉＦｒｅｅ　ＮＹダウ・インデックス
1.8% total gain. I think I'm going to have dig deep into how each is these funds is performing (all 4 were pretty much equally mediocre). Also I'm with SBI Securites and I noticed in another post that some folks are switching to a different iDeCo account to have access to a different selection of funds. Maybe this is what I should be doing? Anyway, if anything looks glaringly obvious, I'd appreciate the feedback. Thanks!

[StockBeard]

about a year ago[...]It seems to have been a stellar year for securities

Details are probably important here. "about" a year ago the s&p500 reached 2930, and today sits at 2997. That's a 2~3% increase in 12 months. Not stellar, and not too far from your numbers. Very different if your comparison point is January 2019 instead of "one year ago". That's because stocks had a 10%+ drop in December 2018.

Is it possible this difference explains what you are seeing?

(note, I did not look in the individual funds you pointed to. But just looking at US based index, this already makes a big difference if you bought 12 months ago, or "in January 2019")

[adamu]

I don't like those EXE-i funds, because they just buy Schwab ETFs you could buy yourself, charge you for the privilege, do no currency hedging, and it's not clear at all how they handle the US withholding tax. I've not actually tracked their performance though.

[Chris D]

Thanks for the feedback. I bought a parcel of VANGUARD MSCI INDEX INTERNATIONAL SHARES ETF around the same time that I opened my iDeCo (late Jul) and that's done over 12% since (including divs). And my iDeCo should have been buying through the lows in Dec/Jan (monthly contributions) so I guess I just expected something closer to that. Anyway, I'll definitely take a closer look at those EXE-i funds and see if I should ditch them for something else.

[mule96]

One thing that has a large influence currently is the exchange rate. You compare JPY based funds with an AUD based ETF.

The Vanguard ETF (VGS) is based in Australian Dollars (non-hedged) if i get that right (first hit on google), but its investment are no Australien stock, therefore influenced by exchange rate changes. So the performance gain of 12% is also influenced by changes in the exchange rates. The AUD was getting weaker the last months, which lead to currency gains in this ETF. There is also a currency hedged version (VGAD) which performed only half of the non-hedged version in the same time.

On the other hand your Japanese funds are non-hedged in JPY. The JPY is getting stronger since quite some time (>5% since Jul 2018 against the USD), and for example reduces the earnings on the Dow Jones Index ETF in the same period (but also against other currencies). The monthly contribution added some gains for sure, but the strong JPY has an considerable effect currently.

Somebody please correct me if I am wrong, but considering the exchange rates it looks as a reasonable result.

[Chris D]

That's a great point! AUD has certainly been weakening against the yen. I absolutely need to take that into consideration, thanks for the reminder.

[Jansen]

ＥＸＥ－ｉ　先進国株式ファンド
ＥＸＥ－ｉ　新興国株式ファンド
ｉＦｒｅｅ　ＮＹダウ・インデックス

I have these, iFree DOW since mid 2017, both EXE-i funds since early 2018. The DOW is up about 10%, while both EXE-i ones are -10-20%, the Emerging Markets once in particular has not recovered since the trade wars started. If you believe that markets do eventually recover, now might be a good time to buy into them.

I've made the switch 100% to the eMaxis S&P fund. Lower fees and, hopefully, less volatility.

[Chris D]

I've broken it down by fund:
ＤＣニッセイ日経２２５インデックスファンドＡ - 4.20%
ＥＸＥ－ｉ 先進国株式ファンド - 2.82%
ＥＸＥ－ｉ 新興国株式ファンド - 0.08%
ｉＦｒｅｅ ＮＹダウ・インデックス - 3.10%

That's for 12 months, Oct '18 to Sep '19. Definitely time to get rid of those EXE-i funds I guess.