RetireJapan

Hello. I'm a newbie on this board, hoping that I can get some advice from the veterans on this board.

Question is this. I gather that eMaxis Slim mutual funds are the preferred Japanese fund for many of you on this board. The question is is the eMaxis Slim better than the Rakuten Vanguard Fund series, and if so, what are the pros and cons?

A little bit about my current position. I have Vanguard ETF positions (VTI, VXUS, BND, BNDX) at Firstrade, which are on an automatic re-investment (DRIP) plan. I want to liquidate these positions and migrate them to a Japanese mutual fund position at SBI or some other online broker in Japan.

I see that the expense ratio + fees that eMaxis Slim charges is a few points lower than that charged by Rakuten Vanguard series. Are there any other differences which make the eMaxis the preferred choice?

Yoroshiku onegai shimasu!

I have both. Rakuten does not offer eMaxis Slim in the iDeCo, so the next best thing are the Vanguard funds.
Over the long term, I don't think there will be a noticeable difference in performance.

Shoutout to adamu

https://retirewiki.jp/wiki/Japanese_global_index_funds

The Rakuten Vanguard fund is literally a wrapper for VT so there's some tax inefficiency in it versus just going straight up for the eMaxis Slim which buys the stocks themselves.

Key quote:

It is important to consider that US ETFs, and the Rakuten and SBI global funds, pay 10% US dividend tax on all foreign stocks. Japanese domiciled funds such as eMaxis Slim All Country / Tawara no-load only need to pay US taxes on the US portion of the dividend, not the entire dividend.

ChapInTokyo wrote: ↑Wed Jul 27, 2022 1:47 am A little bit about my current position. I have Vanguard ETF positions (VTI, VXUS, BND, BNDX) at Firstrade, which are on an automatic re-investment (DRIP) plan. I want to liquidate these positions and migrate them to a Japanese mutual fund position at SBI or some other online broker in Japan.

Just to confirm that you are not a US citizen/green card holder, as that would complicate the answer to this question

zeroshiki wrote: ↑Wed Jul 27, 2022 2:47 am Shoutout to adamu

https://retirewiki.jp/wiki/Japanese_global_index_funds

The Rakuten Vanguard fund is literally a wrapper for VT

Thanks for the shoutout

But this is no longer true, and it says so on that page. The SBI V fund *is* a VT-only wrapper though.

Thanks everybody! I'll definitely swot up on adamu's write up about the eMaxis Slim. I guess it's a toss up between the tax advantage of the eMaxis Slim fund holding actual shares/bonds, against whatever advantage Vanguard might have over eMaxis in terms of trading costs? And just to clarify I'm not American or have a US green card. Sorry for not making that clear in my original post!

ChapInTokyo wrote: ↑Wed Jul 27, 2022 4:09 am Thanks everybody! I'll definitely swot up on adamu's write up about the eMaxis Slim. I guess it's a toss up between the tax advantage of the eMaxis Slim fund holding actual shares/bonds, against whatever advantage Vanguard might have over eMaxis in terms of trading costs? And just to clarify I'm not American or have a US green card. Sorry for not making that clear in my original post!

The low-cost structure, and accumulating aspect (reinvesting dividends), and the high inflows. makes emaxis slim funds a clear winner for those looking to retire in Japan.

Do not pay more for the same indexes.

Thanks everyone for your advice. I see that the eMaxis Slim is currently the best Japanese Mutual fund.

While checking out what investors were saying about the eMaxis Slim vs Rakuten Vanguard vs SBI V Fund, I was for a moment worried by someone's comment saying that the eMaxis is strictly speaking not a passive index investment vehicle because it uses futures contracts in order to better track the index of choice.

But then I went and checked on Vanguard's site and learned that Vanguard's ETFs also sample their indexes using a proprietary sampling method, and that they also use futures contracts so there's not eMaxis Slim and the Rakuten or SBI Vanguard wrapper funds.

Thanks again!