Rakuten Target Year funds?

[N00bster]

Hi everybody,

I have just finished reading Andrew Hallam's Millionaire Teacher, and I have to say I loved it. On top of the sounds advice, Andrew is one of the few authors that didn't desperately try to sell himself with testimonials and shady superlatives, a practice that has made me close several books before even starting the first chapter.

But to the point. In his book, he praises Vanguard a lot, and in particular the Vanguard Target Retirement funds. For those unfamiliar, these are rebalancing funds in which the percentage of bonds increase over time, until you reach a target retirement year. Nothing fancy, just indexes of stocks and funds that rebalance automatically.

This sounds great, and due to the low fees potentially a better investment than costly auto-advisors. I recently got pissed at Theo which sold some of my assets to buy Japanese index securities - way too late, as they were already at the top. I don't need a robot to stupidly chase prices and buy high, I can do that myself thank you.

Anyway. I was looking for equivalents to the Vanguard Target Retirement in Japan, and found out that Rakuten has just started similar funds: https://www.rakuten-toushin.co.jp/fund/nav/ridty/ . See for instance the target 2040 fund: https://www.rakuten-sec.co.jp/web/fund/ ... 90C000DZP3

They are new, but seem to have been doing ok for themselves to far. Management fees, sadly, seem to be close to 1% and I am not sure whether there is a front load charge or anything. Anybody holding these so far? Opinions on whether they are worth it?

[N00bster]

Argh, is it me or does this say that the fund has an upfront fee of 3.24%?

http://www.morningstar.co.jp/FundData/C ... 2016100302

[Dan]

The upfront sales fee of 3.24% that Morningstar shows for the fund is the maximum fee that distributors are allowed to charge. Online brokerages will probably not charge anything for buying the fund. Your second link actually shows the conditions under which Rakuten Securities sells the fund. It says they don't charge any upfront fees for buying the fund: 買付手数料（なし）.

[N00bster]

Well spotted, thanks! In that case, I may consider that fund as an alternative/complement to Theo... Still interested in other opinions of course.

[Dan]

No worries, you’re welcome.

What I would do is check what mother fund or which ETFs the Rakuten fund actually invests in before making a decision. You should be able to find the info in the fund prospectus or a monthly report.

The prospectus should have information about how the yearly fees are calculated. If you can find that, you’ll be able to unpack the fund’s charges. If the fund invests partly in ETFs that are listed overseas, I think there would be a charge for that as well as separate fees going to Rakuten Investment Management.

Let’s hope it won’t take a long time until the online brokerages will make it possible to make small payments on a regular basis in US listed ETFs.

[fools_gold]

Have you looked at the eMAXIS My Manager series? Their fees are 0.54%.