How to balance my portfolio/find Europe-related products for NISA

[Kiyora999]

Hi everybody,

I've finished the process of opening a NISA account with SBI (finally!!!), and iDeCo should be OK this month or the next one.

I've read a lot of things lately on how to balance a portfolio, and I'm willing to not be too conservative since I'm only 29.
However, I think that the geo-diversification is quite important for me and I have troubles finding ETFs and funds for Europe for iDeCo/NISA.

I'll be maxing iDeCo and NISA each year. I'll also open an IB account for the rest of the money, but from next year when I have a little more experience.

I actually have 2 questions:

1/ Should I balance my portofolio as a whole or can I "ignore" iDeCo and balance it separately?

I was thinking that since iDeCo is for pension, maybe I shouldn't balance it the same way as NISA/IB, but also that I shouldn't focus on one market only there too in case it becomes terrible.

For example: (I do not plan to do this but it's easy to understand this way)
If I want 50% overseas stocks/ETF, 40% JP stocks/ETF, 10% REITs+bonds
I shouldn't think that my iDeCo investment should cover the REITs/bonds because it's a smaller amount, but buy them in iDeCo + NISA too no?

At the same time, I can only contribute 23000JPY monthly to iDeCo, and if I understood well, I can only choose the repartition once a year, and these 23000 JPY will be splitted in the selected products.
So since it'll only representing a small part of the global portfolio, isn't it easier to just ignore it when I buy products to balance the portofolio on NISA/IB?


2/ I have both iDeCo and NISA on SBI, but I don't manage to find good funds for Europe.
I found some "Global", "developped countries", a lot of US, but Europe seems to be quite inexistant which makes me very very sad
Do you have some products to recommend me?

I did find these 2:
バンガード FTSE ヨーロッパETF
and
ＵＢＳ　ＥＴＦ　欧州株（ＭＳＣＩヨーロッパ）

But I feel like I'll have a triple taxation with the Vanguard one (so the returns may be bad) and I'm quite not sure about the stability of the other one.

Do you have some recommendations for NISA/iDeCo please?

Thank you very much,

[jcc]

I had a look on rakuten, and all I could find was overpriced garbage.

Despite being index funds charging .7% and upwards on management. Stuff like http://www.morningstar.co.jp/FundData/S ... 2010070104

Using morningstar jp search function for european funds only comes up with 3 funds which all seem pretty crap to me(including the above one): http://www.morningstar.co.jp/FundData/D ... .do?mode=2

If you are investing in the US, you could consider just getting one of the developed countries funds to get US + europe at the same time. They're weighted by market cap, so you'd only be getting something like 25% europe in it(and about 65% us with a bit of canada/australia/etc to fill out the rest)...

I don't really have strong opinions about subdividing between nisa/ideco/normal, except that I personally feel that using domestic funds that reinvest dividends internally is quite good in them since you get to "expand" the tax free bracket. So if I was to have an allocation for ETF's (e.g. VOO) I'd probably just stick that in my normal account, but I could see an argument for putting the things you hope to get the best returns from in your tax free account.

[Kiyora999]

Hi jcc, thank you very much for your reply!

Yes I agree with you, everything looks like bad T_T

I think I'll do as you say with one fund with developed countries, but I was also very interested by the US Vanguard VTI ETF and a few Japanese funds and stocks, so I'm afraid that my portfolio becomes too unbalanced if I don't buy more Europe...

Maybe I don't have a choice for the moment and I have to go like this until I get Interactive Brokers next year and I should focus on buying good dividends stocks from Europe there...

I think that when you have the choice, your idea to use NISA to avoid the tax on the dividends is good! My goal is to start to build a dividend portfolio so whatever I could put in NISA with good dividends will be there! (well at least for 5 years...)
I may overthink with the geo-diversification since it's quite a lot of money so I wanted to split everything well from the start, but I should maybe do it in 1,5-2 years.

[adamu]

Why don't you just buy a global fund? Then you get all the geo-diversification automatically and never have to worry about rebalancing.

[Kiyora999]

Why don't you just buy a global fund? Then you get all the geo-diversification automatically and never have to worry about rebalancing.

Hi Adamu, thank you very much for your reply!

I don't really like that kind of funds because I feel like you buy all and nothing at the same time, and it may not be the best in terms of growth/risks. I prefer to separate Japan for sure, and then find things proper to US, EU and emerging markets separately.
I may be totally wrong though ahaha.

I think I'll buy the 1550 international one, which exclude Japan, ニッセイ－＜購入・換金手数料なし＞ニッセイ外国株式インデックスファンド and a small portion of 1681 to get the overseas exposure at the beginning since I don't seem to have much choice for NISA.
For the Japanese part, I'll start with things like 1348 and 1329 + a few good dividend stocks.

Then when I get IB I might rebalance things completely by going more aggressive in the European market with dividend stocks (which seems to be way better than Japanese ones).
And buy more and more individual Japanese dividend stocks in my NISA.

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What do you guys think of ignoring bonds and buying Japanese and overseas REITs instead?

[crew]

For Europe, have you considered UBS ETF 欧州株 (MSCIヨーロッパ) 1386 or UBS ETF ユーロ圏大型株501385? 0.2% and 0.15% fees respectively.

edit: just noticed that you already mentioned 1386, but may I ask what you mean by triple taxation?