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Investing in "bonds" on tsumitate NISA
Posted: Fri Nov 27, 2020 2:22 pm
by Viralriver
I see a lot of talk on this forum about investing your age in bonds and the rest in index funds. I'm on a tsumitate NISA, and am wanting to split my index fund contribution between various eMAXIs:
All Country
Developed Nations
Emerging Markets
S&P 500
But I can't find anything which specificies "bonds". Is there a specific section I can look at on the Rakuten tsumitate NISA page to display these products?
Thank you!
Re: Investing in "bonds" on tsumitate NISA
Posted: Fri Nov 27, 2020 9:49 pm
by Tony
Yeah, Rakuten has exactly 0 domestic or foreign bond funds in its Tsumitate NISA offerings. Seeing as you're not likely to see a huge increase in the value of bonds, you should be fine having them in a taxable account, and prioritize high growth investments in your NISA.
Re: Investing in "bonds" on tsumitate NISA
Posted: Fri Nov 27, 2020 9:56 pm
by fools_gold
Viralriver wrote: ↑Fri Nov 27, 2020 2:22 pm
I see a lot of talk on this forum about investing your age in bonds and the rest in index funds. I'm on a tsumitate NISA, and am wanting to split my index fund contribution between various eMAXIs:
All Country
Developed Nations
Emerging Markets
S&P 500
But I can't find anything which specificies "bonds". Is there a specific section I can look at on the Rakuten tsumitate NISA page to display these products?
Thank you!
You can't buy pure bond funds in a Tsumitate NISA. The only way is through a balance fund or by buying bonds outside your NISA.
By the way, there's a lot of overlap between the all-country, developed markets, and S&P 500 funds. You'd be buying mostly US stocks.
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 12:51 am
by Viralriver
Posted a reply and it disappeared as I went through a tunnel... To try and repeat ^^'
Thanks both of you for the incredibly helpful replies. Didn't think of investing in the bonds outside of NISA, will do that
. Is there a similarly highly suggested bond, akin to the highly suggested all country eMAXISslim index fund?
Also thanks for the warning on double dipping - will try and find some information on what each of these funds actually invest in and go from there
As an aside, is there any downside to me using my Rakuten Securities account to invest outside of the NISA, rather than an independent broker? I see a lot of people here who have an account with Rakuten/SBI for NISA and then something else for their non-NISA investments... but honestly if there's no downside I would rather not have them separate!
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 2:02 am
by fools_gold
Viralriver wrote: ↑Sat Nov 28, 2020 12:51 am
Posted a reply and it disappeared as I went through a tunnel... To try and repeat ^^'
Thanks both of you for the incredibly helpful replies. Didn't think of investing in the bonds outside of NISA, will do that
. Is there a similarly highly suggested bond, akin to the highly suggested all country eMAXISslim index fund?
Also thanks for the warning on double dipping - will try and find some information on what each of these funds actually invest in and go from there
As an aside, is there any downside to me using my Rakuten Securities account to invest outside of the NISA, rather than an independent broker? I see a lot of people here who have an account with Rakuten/SBI for NISA and then something else for their non-NISA investments... but honestly if there's no downside I would rather not have them separate!
Emaxis Slim have bond funds too. There's a developed markets one as well as a domestic one. You can see the full line up here
https://emaxis.jp/lp/slim/pr1/index.html
Which to buy is a difficult question. Yields on Japanese bonds are low, but if you invest in an unhedged foreign bond fund you lose some of the hedging benefits of bonds. That, is foreign bonds are more correlated with stocks than Japanese bonds. For that reason I have a mix of foreign and domestic bonds.
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 3:11 am
by Kanto
There are not a lot of great bond fund choices in Japan.
Here are two I would recommend.
eMAXIS Slim Advanced Government Bond Index -> Tracks the FTSE World Government Bond Index
ｅＭＡＸＩＳ Ｓｌｉｍ 先進国債券インデックス
https://www.rakuten-sec.co.jp/web/fund/ ... 0C000END3
Real cost -> 0.170%
Also
Rakuten Global Bond Index (Forex Hedge) Fund -> This is a hedged version of the Vanguard fund BNDW
楽天・全世界債券インデックス（為替ヘッジ）ファンド
https://www.rakuten-sec.co.jp/web/fund/ ... 90C000HBG4
Real cost ->0.282%
.................
Viralriver wrote: ↑Sat Nov 28, 2020 12:51 am
As an aside, is there any downside to me using my Rakuten Securities account to invest outside of the NISA, rather than an independent broker? I see a lot of people here who have an account with Rakuten/SBI for NISA and then something else for their non-NISA investments... but honestly if there's no downside I would rather not have them separate!
The downside is that only 1000万 remains insured and guaranteed. If you Have your NISA and Ideco and taxable under one roof you can hit this limit fairly quickly.
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 1:03 pm
by Viralriver
Kanto wrote: ↑Sat Nov 28, 2020 3:11 am
There are not a lot of great bond fund choices in Japan.
Here are two I would recommend.
eMAXIS Slim Advanced Government Bond Index -> Tracks the FTSE World Government Bond Index
ｅＭＡＸＩＳ Ｓｌｉｍ 先進国債券インデックス
https://www.rakuten-sec.co.jp/web/fund/ ... 0C000END3
Real cost -> 0.170%
Also
Rakuten Global Bond Index (Forex Hedge) Fund -> This is a hedged version of the Vanguard fund BNDW
楽天・全世界債券インデックス（為替ヘッジ）ファンド
https://www.rakuten-sec.co.jp/web/fund/ ... 90C000HBG4
Real cost ->0.282%
.................
Viralriver wrote: ↑Sat Nov 28, 2020 12:51 am
As an aside, is there any downside to me using my Rakuten Securities account to invest outside of the NISA, rather than an independent broker? I see a lot of people here who have an account with Rakuten/SBI for NISA and then something else for their non-NISA investments... but honestly if there's no downside I would rather not have them separate!
The downside is that only 1000万 remains insured and guaranteed. If you Have your NISA and Ideco and taxable under one roof you can hit this limit fairly quickly.
Thanks for the responses.
I don't have an iDeCo account, but this 1000万円 limit is very worrying... this includes NISA as well? I'm expecting to hit that at some point on my trajectory just from my NISA investments and gains on those... what exactly does it mean to be insured and guaranteed? I.e. if Rakuten went bust anything above that is gone, or something else?
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 1:36 pm
by RetireJapan
I though the guarantee only applied to cash deposits. Your investments are supposed to be ringfenced
and held separately so in principle are safe, but they are not guaranteed by the government.
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 3:32 pm
by Kanto
RetireJapan wrote: ↑Sat Nov 28, 2020 1:36 pm
I though the guarantee only applied to cash deposits. Your investments are supposed to be ringfenced
and held separately so in principle are safe, but they are not guaranteed by the government.
http://www.jipf.or.jp/en/introduction/index.html
Re: Investing in "bonds" on tsumitate NISA
Posted: Sat Nov 28, 2020 11:57 pm
by RetireJapan
Excellent! Thanks for the correction
So the situation is even better than I thought.
Losing money through broker bankruptcy and mismanagement seems extremely unlikely though.