No Purchase Fee for major US Index funds

[tofusoba14]

Hello,

So far i have always been investing in the Japanese Mutual funds ie. eMaxis - Developed Country, Developing Country and All Country in various proportions. Mainly because to buy them there is no fee (no brokerage).
However seems on Rakuten securities they have added a list of stocks that are basically US based index funds and they have excluded the fees for them ( no brokerage)
Here is the link explaining that : https://www.rakuten-sec.co.jp/web/forei ... 0-etf.html


Now although on selling there may be a US withholding tax and then japan withholding tax, however the US based index funds have much lower expense ration that the japan ones, which eventually will provide more returns than the japan emaxis ones.

What do you all think ?

[adamu]

You also have to pay 0.25 yen per dollar for currency conversion both ways, and the transaction fee when you sell.

US withholding taxes apply to all of the dividends too. And if you put them in a NISA, you can't claim that witholding tax back - even in a taxable account you might not be able to get all of it back - and need to submit a tax return if you want to try.

https://retirewiki.jp/wiki/Japanese_glo ... th_US_ETFs

[zeroshiki]

Those ETFs have always been there and have had "0" fees. The reason they're getting more attention now is because Rakuten said that their new SPU condition of buying US securities EXCLUDES that list. So yeah, no thanks Rakuten.

[captainspoke]

You also have to pay 0.25 yen per dollar for currency conversion both ways, and the transaction fee when you sell.
...

Imagine being able to go back six months or more, and being 'penalized' a quarter yen to get into dollars.

(and if 0.25% seems high, then you probably should avoid using Wise)



No transaction fees for buying/selling stocks and ETFs have been a trend in the US for a couple few years now. There is a very minor SEC fee on sales (I think previously rolled in with cost of sale)--but it's very small fractions of a percent ($22.10 per million dollars, or about $.20 on a $10k sale).

[TBS]

...however the US based index funds have much lower expense ration that the japan ones, which eventually will provide more returns than the japan emaxis ones.

...
https://retirewiki.jp/wiki/Japanese_glo ... th_US_ETFs

The big online brokers pay back points for holding Japanese mutual funds, and credit card points can be harvested to lower purchase costs. This lowers the gap between US based fund expense ratios and Japanese funds, in addition to all the other points adamu and others made.

The points benefit wasn't listed on the wiki page, so I just added it.

[adamu]

if 0.25% seems high, then you probably should avoid using Wise

It's not 0.25%, it's 1 yen per 4 dollars, irrespective of the exchange rate.

A quick check comparing converting $1000 on SBI vs. Wise.

SBI: ¥128,380
Wise: ¥128,105

Wise is slightly cheaper (not much in it and Wise gets more expensive as the numbers go up, SBI doesn't). But it's not really relevant, because there's no practical method to send USD from Wise to Japanese brokers, as far as I know.

The point is that there are additional exchange costs involved in trading US funds on Japanese brokers that don't apply to trading equivalent Japanese funds.

The points benefit wasn't listed on the wiki page, so I just added it.

Thanks!

[captainspoke]

Sorry--I saw that 0.25 and read it as percent.

This wiki has a nice chart comparing rates. Scroll down a screenful or two:

https://www.reddit.com/r/JapanFinance/w ... /transfers