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ETF vs Mutual Fund? -> Bond Index
Posted: Wed Aug 26, 2020 2:58 am
by Kanto
I was reading through the old thread where the members here did an amazing job of mapping out the pros and cons of American ETFs vs Japanese mutual funds. The differences are marginal, but every percentage point counts!
Was there a consensus for bond index funds? For Example, BND vs Emaxis Slim advanced Gov. Bond Index?
https://www.rakuten-sec.co.jp/web/fund/ ... 90C000END3 -> Emaxis
https://www.rakuten-sec.co.jp/web/marke ... ?ric=BND.P ->Vanguard BND
These will be kept in a taxable accout.
Re: ETF vs Mutual Fund? -> Bond Index
Posted: Wed Aug 26, 2020 8:27 am
by TokyoWart
For those of us who are US citizens the US ETF is a better choice because the Japanese mutual fund comes with very complicated US tax reporting rules. I am pretty impressed with the eMAXIS offerings but one additional point to keep in mind is that the management fee is higher for that eMAXIS fund (0.154%) compared to the fee internal to BND (0.035%). (It seems like extra transaction or other fees come with owning a US ETF in a Japanese account so I can't be sure that fee difference really holds in practice.)
Re: ETF vs Mutual Fund? -> Bond Index
Posted: Wed Aug 26, 2020 8:56 am
by Kanto
TokyoWart wrote: ↑Wed Aug 26, 2020 8:27 am
For those of us who are US citizens the US ETF is a better choice because the Japanese mutual fund comes with very complicated US tax reporting rules. I am pretty impressed with the eMAXIS offerings but one additional point to keep in mind is that the management fee is higher for that eMAXIS fund (0.154%) compared to the fee internal to BND (0.035%). (It seems like extra transaction or other fees come with owning a US ETF in a Japanese account so I can't be sure that fee difference really holds in practice.)
I am Canadian so that is not an issue. I think I will stay with the Emaxis for now, but I remain uncertain if it is the best Bond Index fund for Non-americans.