RetireJapan

Is there such as thing as a Japanese mutual fund which can substitute for Vanguard VEA (FTSE Developed Markets Index Fund ETF) or VXUS (Total International Stock Index Fund ETF)?

I happen to have a big holding of VTI (Total US Stock Market ETF) so I'd like to have something to cover international stocks ex-US, and all of the Japan domiciled funds I've seen seem to be either All Country incl US or All Country ex-Japan, and not all country ex-US.

Any suggestions would be much appreciated!

shyam wrote: ↑Mon Jun 10, 2024 10:57 am By combining a Japanese TOPIX or broader Japanese market fund with a developed ex-Japan fund, you can achieve exposure to developed markets outside the US, similar to what VEA offers. While not an exact replica, it provides a good alternative using Japanese mutual funds

That is not what OP wants. A Kokusai index is mostly US.

ChapInTokyo wrote: ↑Mon Jun 03, 2024 7:29 am Is there such as thing as a Japanese mutual fund which can substitute for Vanguard VEA (FTSE Developed Markets Index Fund ETF) or VXUS (Total International Stock Index Fund ETF)?

I happen to have a big holding of VTI (Total US Stock Market ETF) so I'd like to have something to cover international stocks ex-US, and all of the Japan domiciled funds I've seen seem to be either All Country incl US or All Country ex-Japan, and not all country ex-US.

Any suggestions would be much appreciated!

{country ex-US} Global All Cap ex US Index



You are unlikely to find an non-wrap funds that use the FTSE trackers as they are expensive to run, MSCI trackers are more common outside of the US.

Here is an SBI wrap: https://site0.sbisec.co.jp/marble/fund/ ... =189312236

Tsumitate Wrestler wrote: ↑Tue Jun 11, 2024 12:17 am

shyam wrote: ↑Mon Jun 10, 2024 10:57 am By combining a Japanese TOPIX or broader Japanese market fund with a developed ex-Japan fund, you can achieve exposure to developed markets outside the US, similar to what VEA offers. While not an exact replica, it provides a good alternative using Japanese mutual funds

That is not what OP wants. A Kokusai index is mostly US.

ChapInTokyo wrote: ↑Mon Jun 03, 2024 7:29 am Is there such as thing as a Japanese mutual fund which can substitute for Vanguard VEA (FTSE Developed Markets Index Fund ETF) or VXUS (Total International Stock Index Fund ETF)?

I happen to have a big holding of VTI (Total US Stock Market ETF) so I'd like to have something to cover international stocks ex-US, and all of the Japan domiciled funds I've seen seem to be either All Country incl US or All Country ex-Japan, and not all country ex-US.

Any suggestions would be much appreciated!

{country ex-US} Global All Cap ex US Index

You are unlikely to find an non-wrap funds that use the FTSE trackers as they are expensive to run, MSCI trackers are more common outside of the US.

Here is an SBI wrap: https://site0.sbisec.co.jp/marble/fund/ ... =189312236

Thanks for this. I've looked and looked but couldn't find any Japan domiciled fund like a VEA. No demand for it here obviously! I think I might have to bite the bullet and sell off my VTI holdings and reorganize my portfolio around Japan domiciled rather than US domiciled funds/ETFs....

I moved a chunk of my mutual funds into US ETFs a year and a half back, buying VTI and VEA.

There was nothing wrong with Japan mutual funds, but I have no major gripes with US ETFs personally either. Some extra work around tax filing time is about it.

sutebayashi wrote: ↑Tue Jun 11, 2024 9:02 pm I moved a chunk of my mutual funds into US ETFs a year and a half back, buying VTI and VEA.

There was nothing wrong with Japan mutual funds, but I have no major gripes with US ETFs personally either. Some extra work around tax filing time is about it.

I think if we are talking about taxable accounts, the difference is probably pretty small.

However, tsumitate buys via credit cards usually outperform other options due the combination of free points and trust point yield, depending on the broker.

If you are buying over 10 man a month, and you are buying non-standard indexes then these advantages do not exist.

(This assumes you are turning around and reinvesting those points). Also, no hassle with "share pricing", dividends and tax filings. And Japanese funds have much better options for creating cash flow in retirement. Basically, I think ETFs are pretty darn inconvenient.

sutebayashi wrote: ↑Tue Jun 11, 2024 9:02 pm I moved a chunk of my mutual funds into US ETFs a year and a half back, buying VTI and VEA.

There was nothing wrong with Japan mutual funds, but I have no major gripes with US ETFs personally either. Some extra work around tax filing time is about it.

Well yes, I already file for foreign tax credit come kakuteishinkoku time, and even have a programme to calculate the yen cost basis for my DRIP reinvestments so that part of it is no hassle.

The thing is, while the foreign tax credit makes VTI superior to a non-distributing Japanese mutual fund, I will still be left with double taxation on the WHT levied by the originating countries in a VEA plus the 20.315% WHT charged by the NTA here in Japan.

That's where I thought I could reduce the drag from the double taxation a tiny bit by postponing the tax event on the distributions by going with a non-distributing Japanese mutual fund.

Thinking it through though, at Firstrade the quarterly dividends on a VEA is reinvested with only the originating country WHT and the US WHT at 10% deducted while the Japanese WHT is paid to the tax office after the kakuteishinkoku, so in terms of compounding growth from re-investments, a VEA or other US ETF with DRIP reinvestments will in fact perform just as well if not better than a Japanese mutual fund since the US ETF has lower expense ratios. The Japanese funds are going to have to pay the same two WHTs even if they reinvest internally and it won’t be possible to get foreign tax credit on the tax withheld by the US either. Maybe I'll stay with US ETFs after all?