RetireJapan

I've been using mutual funds exclusively since opening my Monex account, and thanks to help from this site and other resources I've pretty much got everything in some form of emaxis slim product at this stage.

All my funds in my regular accounts and NISA are set to 分配金再投資コース (reinvestment course). I don't have any desire for dividends now and would rather the earnings be reinvested, so this seemed like the best option.

What I'm curious about, and I've never worked out how to calculate it, is what is the value of the dividends that weren't paid out but instead were reinvested. Logic tells me that my dividends would be paid out in the form of additional units, and I should be able to track the history of my units on the site. If the dividend period is end of April (seems to be from the literature) then I'd expect to see additional units in my statements in April/May of previous years.

Is the above right, or am I way off base here?

Thanks
JM

JapaneseMike wrote: ↑Sat Apr 10, 2021 12:18 am I've been using mutual funds exclusively since opening my Monex account, and thanks to help from this site and other resources I've pretty much got everything in some form of emaxis slim product at this stage.

All my funds in my regular accounts and NISA are set to 分配金再投資コース (reinvestment course). I don't have any desire for dividends now and would rather the earnings be reinvested, so this seemed like the best option.

What I'm curious about, and I've never worked out how to calculate it, is what is the value of the dividends that weren't paid out but instead were reinvested. Logic tells me that my dividends would be paid out in the form of additional units, and I should be able to track the history of my units on the site. If the dividend period is end of April (seems to be from the literature) then I'd expect to see additional units in my statements in April/May of previous years.

Is the above right, or am I way off base here?

Thanks
JM

The first point to keep in mind is that many (if not most) funds reinvest internally regardless of what setting you choose. The setting appears even if you have no choice in the matter, and selecting a dividend option for an internally reinvesting fund will have no effect.

Secondly, for funds that do pay out dividends, the payment schedule will be laid out in the prospectus. You should not have to hunt for it, as that feature is the main reason people would select dividend funds.

Finally, the dividend is paid out in cash. The NAV or total value of the fund shrinks the day following the ex-dividend date. (The last day you can buy the fund and receive a dividend). Your dividend payment will arrive in your money market account per the date written in the prospectus.

Dividend investing, therefore, is less tax-efficient, and not recommended for most investors.

Thanks Kanto for your reply. I understand and agree to your point on dividend investing being less profitable since if you realise the dividend it'll be taxable. I am hoping the reinvestment course above doesn't do that since it's all within the fund?

I guess my question is pretty nuanced and maybe I didn't explain it properly. I think wanting to know the value I'm 'gaining' by choosing the reinvestment course is a form of FOMO To restate, how do I know what the reinvestment course is doing for me? If I choose a 'pay dividend course I will get tangible dividend payments that are easy to understand. Not so with the reinvestment option, right?

For an example, let's take emaxis slim all country (since I know a lot of us have that one.), and lets imagine I invest 5,000 yen a day in it for 5 years.

So there's ~260 trading days a year, x 5000 = 1,300,000 a year x 5 = 6,500,000 yen invested. And for simplicity let's say the average cost price per unit over the period is 100yen so i've got 65,000 units.

Now, 5 years later, the current valuation of the units is 140 yen per unit, so my portfolio is worth 9,100,000. (Woohoo, I've not done too badly)

So, back to my original point. 分配金再投資コース

Is there any way to determine how to break up the returns I'm seeing.

Since it's examis all country, but the fund is denominated in yen, I know there is an FX portion. I don't believe it's possible to separate that out easily.
Also, it tracks indices across the world, so there will be an asset appreciation portion.

So, in your point below are you saying that the 'reinvested dividend' course, just appreciated the asset, or more accurately reinvested dividends keep the fund value elevated (as opposed to seeing value drop down when a fund pays out a dividend)

Thanks
JM

JapaneseMike wrote: ↑Mon Apr 12, 2021 12:10 am
So, in your point below are you saying that the 'reinvested dividend' course, just appreciated the asset, or more accurately reinvested dividends keep the fund value elevated (as opposed to seeing value drop down when a fund pays out a dividend)

Thanks
JM

To your questions, there are two options a fund can choose, (a) increase your shares ex-dividend or (b) increase NAV. I think usually (a) is what most funds do. I do not believe the difference matters for the average shareholder.

The point is moot as you cannot choose to receive dividends with Emaxis-Slim All Country. The button is there, but clicking it will do nothing. The fund internally reinvests.

As far as tracking dividends and FX differences go, you would need to compare it to the index.

Emaxis Slim All country tracks the MSCI ACWI index on a Yen basis.

This is an index of over 3000 international stocks. Also, index funds do not track the index exactly. They do not necessarily own every single individual stock or in the same exact amounts. They are trying to track the index as best as possible

You also need to consider that when they buy a fund determines if they will receive dividends or not, and we have no figures on their exact amount of holdings for every individual stock.

It simply is not possible for a single person to do this.

.......................

However, you can look at the dividend information provided for an ETF that tracks the same index, and get a good guess!

iShares MSCI ACWI ETF 4 Year Average Dividend Yield 2.05%

https://seekingalpha.com/symbol/ACWI/dividends/yield

JapaneseMike wrote: ↑Mon Apr 12, 2021 12:10 am Is there any way to determine how to break up the returns I'm seeing.

One way is to plot the eMAXIS Slim All Country price against the benchmark ACWI price (version without reinvestment dividends). MSCI publish that data under the "Price" label here. I plotted it below. The faster growth of the blue eMAXIS Slim line than the orange index line is the benefit you get from the internal dividend reinvestments.

Another way is to compare against the performance of the new MAXIS All Country ETF (2559) which pays out the dividends. You can see the gross dividends paid out to date on that link, although the ETF has only been going since the start of last year.

Also, everything Kanto said.

Thanks Kanto for the clear explanation. I have a much better understanding of this now.

And TBS, that graph is super helpful. It's kinda how I expected the reinvested fund to diverge from the underlying asset over time - so comforting to see it clearly show that in the chart.

Thank you both so much