Japan’s Best Mutual Fund Lineup?
In recent years, mutual funds have become one of the best ways to invest in Japan.
Fees are low thanks to fierce competition, it is easy to invest automatically, and funds can reinvest dividends internally.
Some of the most popular funds are in the eMaxis Slim series.
But there are 13 of them. Here’s a look at what they are and which ones you might want to choose:
ｅＭＡＸＩＳ Ｓｌｉｍ 国内株式（ＴＯＰＩＸ）
This is a Japanese stock fund. It is based on the TOPIX index, not the Nikkei 225 index. The TOPIX index is much larger (1600+ companies vs. 225 in the Nikkei).
ｅＭＡＸＩＳ Ｓｌｉｍ 国内株式（日経平均）
This is a Japanese stock fund based on the Nikkei 225 index, the biggest 225 companies in Japan. It is less diversified than the TOPIX index.
ｅＭＡＸＩＳ Ｓｌｉｍ 先進国株式インデックス
This is a developed countries stock fund. It does not include Japanese stocks.
ｅＭＡＸＩＳ Ｓｌｉｍ 新興国株式インデックス
This is a developing countries stock fund.
ｅＭＡＸＩＳ Ｓｌｉｍ 米国株式（Ｓ＆Ｐ５００）
This is a US stock fund based on the S&P500 list of the 500 largest companies in the US.
ｅＭＡＸＩＳ Ｓｌｉｍ 全世界株式（除く日本）
This is an all-world stock fund that does not contain Japan, but does contain developed and developing countries.
ｅＭＡＸＩＳ Ｓｌｉｍ 全世界株式（オール・カントリー）
This is an all-world stock fund including developed coutries, developing countries, and Japan. The proportions match the current world markets.
ｅＭＡＸＩＳ Ｓｌｉｍ 全世界株式（３地域均等型）
This is an all-world stock fund that contains 33.3% developed countries, 33.3% developing countries, and 33.3% Japan.
ｅＭＡＸＩＳ Ｓｌｉｍ 国内債券インデックス
This is a Japanese bond fund. It contains mostly government bonds, with a small amount of company bonds.
ｅＭＡＸＩＳ Ｓｌｉｍ 先進国債券インデックス
This is a developed country bond fund. It does not include Japanese bonds. It is mostly made up of US and European government bonds.
ｅＭＡＸＩＳ Ｓｌｉｍ 国内リートインデックス
This is a Japanese REIT (real estate investment trust) fund. It includes Japanese commercial and residential real estate investment.
ｅＭＡＸＩＳ Ｓｌｉｍ 先進国リートインデックス
This is a developed country REIT (real estate investment trust) fund. It includes developed countries (75% or so is USD denominated).
ｅＭＡＸＩＳ Ｓｌｉｍ バランス（８資産均等型）
This fund is made up of 12.5% each of Japanese stocks, bonds, REITs, developed country stocks, bonds, REITs, and developing country stocks, and bonds.
Now, some of these funds are better than others. The all-country global fund is excellent, and can actually be enough for many people. It can be combined with the developed country bond fund to make a simple portfolio.
The S&P500 fund, Japan, developing country, and developed country stock funds can be used to make more complex portfolios, and the bond and REIT funds can be used to diversify.
The three-way split global stock fund doesn’t make much sense to me. And the 8-way balanced fund is dreadful. I get the feeling they were designed to make pretty graphs rather than fulfil any kind of investment purpose.
Personally I own the all-country and developed country bond funds, and as of this year all my Japan-domiciled investments are in these index funds.
If you would like to learn more about investing in Japan, or how to design a portfolio that works for you, please come by the RetireJapan website and forum. We’d love to help you out.
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