Expected read time: 10 min
- What is asset allocation? What should you watch out for?
- Consider your costs or you will earn less!
- Why do I recommend these 13 funds?
- Why do I recommend these four types of funds?
- World stock investment trust
- SBI- SBI All Country Stock Index Fund (a.k.a. Yukidaruma (All country))
- Mistubishi UFJ Kokusai- eMAXIS Slim All Country Stock (All country)
- Mistubishi UFJ Kokusai- eMAXIS Slim All Country (Except Japan)
- One- Tawara No Load All Country Stock
- American Stock Investment Trust
- SBI- SBI V National Stock Index Gund (goes by SBI V National Stocks)
- SBI – SBI V S&P500 Index Fund (goes by SBI V S&P 500)
- Mistubishi UFJ Kokusai- eMAXIS Slim American Stock (S&P500)
- Developed Country Stock Investment Funds
- SBI- SBI Developed Country Stock Index Fund (goes by Yukidaruma (Developed country))
- Nissei- <no buying fee/ no cashing fee> Nissei Foreign Country Stock Index Fund
- Mistubishi UFJ Kokusai- eMAXIS Slim Developed Country Stock Index
- One – Tawara No Load Developed Stock
- Balanced Funds
- Mistubishi UFJ Kokusai- eMAXIS Slim All Country (3 Geographical equality type)
- One- Tawara No Load Balanced (8 Equal Assets)
Hi there, Kinkajyuu here.
After opening a Tsumitate NISA you need to select funds to invest in with that account. You may wonder which funds to choose from.
In my case, I researched a lot and was still wondering which one is better to choose when I opened my first account with Tsumitate NISA.
However, I realized that there are two important points when choosing, and that made my decision easy. Those two points are about asset allocation (my portfolio) and cost.
Today, I will be writing bout funds for Tsumitate NISA offered by SBI Securities (although other brokerages such as Rakuten have similar funds).
What is asset allocation? What should you watch out for?
Asset allocation is how you divide your portfolio between different investments. To select your asset allocation, you can consider how much risk you can take, how much you want to invest in different regions, industries, currencies… and so on.
It is rather important because if you do not follow an asset allocation, your investments may be riskier than you are actually comfortable with. If you keep to your asset allocation, you can choose funds easily.
Consider your costs or you will earn less.
The costs on investment include fees such as commissions and management fees. You can look at them as fixed fees when investing which you must pay. In my opinion, good funds cost very little.
For example, “ＳＢＩ－ＳＢＩ・Ｖ・Ｓ＆Ｐ５００インデックス・ファンド （愛称：ＳＢＩ・Ｖ・Ｓ＆Ｐ５００(SBI – SBI V S&P500 index fund (goes by SBI V S&P 500))” costs just 0.0938%. Even though this is one of the lowest cost funds, it has very good high returns, earning 37.10% in the past year.
Although we can’t avoid management fees entirely, we can do our best to pick low-costing funds so as not to reduce returns when investing.
Return – Cost = Profit (Loss)
Why do I recommend these 13 funds?
I recommend these 13 funds because they are index funds which have low cost and high returns. First are world funds which include almost all countries on Earth. Second are U. S. index funds, which include just American stocks. Third are developed countries index funds, which include only stocks for developed countries. Last are balanced funds, which include asset classes like stocks, bonds, REITs and so on.
Why I recommend these four types of funds?
It is better to have a balanced set of funds which do not overlap each other; this is known as dispersion.
To be honest, balanced funds can be unstable when the market is down and cause beginner investors to panic, but I still recommend them. The reason why is that they are an easy way to get started investing because you can pick just one fund and have exposure to most of the market.
* Expense ratio is listed next to each fund
World stock investment trust
World stock funds are popular because they are an easy way to invest in diversified stocks with just one fund. Additionally, these funds tend to have great returns, so they are ideal for beginners – easy, low cost, and profitable.
Each fund’s country weight is different so you can compare them and choose which one you like. If you cannot find a single fund which you like, you can of course choose several to raise or lower your exposure to any one country (US, Japan, etc).
SBI- SBI All Country Stock Index Fund (goes by Yukidaruma (All country))
(US= 55%, Developed countries= 35%, Emerging countries= 10% )
Mistubishi UFJ Kokusai- eMAXIS Slim All Country Stock (All country)
(US= 57.8%, Japan=6.5%, UK= 3.8%, France= 2.9%, Canada= 2.8%, Other developed countries=13.1%, Emerging countries= 13.0% )
三菱ＵＦＪ国際－ｅＭＡＸＩＳ Ｓｌｉｍ 全世界株式（除く日本） 0.1144%
Mistubishi UFJ Kokusai- eMAXIS Slim All Country (Except Japan)
(US= 61.8%, UK= 4.0%, France= 3.1%, Canada= 3.0%, German= 2.7%, Other developed countries= 11.4%, Emerging countries=13.9%)
Ｏｎｅ－たわらノーロード 全世界株式 0.132%
One- Tawara No Load All Country Stock
(Developed countries expect Japan=80.97%, Emerging countries= 12.80%, Japan=6.17% )
American Stock Investment Trust
In this section, I will introduce index funds which include all American stocks or stocks in the S&P500 index.
American stocks have historically increased over time, so they are popular with investors who want to maximize their returns. Also, most people assume American stocks will continue to grow because the American population is still growing.
Having a higher population means there are many consumers in the country. Consumer consumption drives the market, which in turn causes stocks to rise.
National stock investment trusts means if you buy one you can invest all American listed stocks.
S&P 500 is short for Standard & Poor’s 500 Index. An index, like Nikkei 225, includes a subset of stocks to represent part of, or the entire, market. The S&P500 is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies.
National stock investment trusts
SBI- SBI V National Stock Index Gund (goes by SBI V National Stocks)
S&P500 investment funds
SBI – SBI V S&P500 Index Fund (goes by SBI V S&P 500)
三菱ＵＦＪ国際－ｅＭＡＸＩＳ Ｓｌｉｍ米国株式（Ｓ＆Ｐ５００） 0.0968%
Mistubishi UFJ Kokusai- eMAXIS Slim American Stock (S&P500)
Developed country stock investment funds
Developed countries generally means G7 countries. Their infrastructures are solid and the investment rules are regulated by the governments. Because of their developed condition, they are good for stable investments.
SBI- SBI Developed Country Stock Index Fund (goes by Yukidaruma (Developed country))
(US=60%, Developed countries expect US= 40%)
Nissei- <no buying fee/ no cashing fee> Nissei Foreign Country Stock Index Fund
(US= 71.7%, UK= 4.7%, Furnce= 3.8%, Canada=3.4%, Switzerland= 3.2%, German= 3.1%,Australia= 2.3%, Sweden= 1.1%, Other=5.5%)
三菱ＵＦＪ国際－ｅＭＡＸＩＳ Ｓｌｉｍ 先進国株式インデックス 0.1023%
Mistubishi UFJ Kokusai- eMAXIS Slim Developed Country Stock Index
(US= 71.9%, UK= 4.7%, France= 3.7%, Canada= 3.5%, German= 3.1%, Switzerland= 3.0%, Australia= 2.3%, Netherland= 1.4%, Sweden= 1.2%, Other 5.3%)
Ｏｎｅ－たわらノーロード 先進国株式 0.10989%
One- Tawara No Load Developed Stock
(US= 65.47%, UK= 4.24%, Canada= 3.45%, France= 3.28%, Switzerland= 3.15%, Other= 15.28%)
These types of funds are those where fund managers choose several asset classes, industries, regions, and currencies.
By buying just one balanced fund, you diversify your asset allocation. It is an easy way to invest but you have to be cautious because these types of funds are quite volatile and can change price rapidly.
Mistubishi UFJ Kokusai- eMAXIS Slim All Country (3 Geographical equality type)
(Japan=1/3, Developed countries except Japan=1/3, Emerging countries= 1/3)
Ｏｎｅ－たわらノーロード バランス（８資産均等型） 0.154%
One- Tawara No Load Balanced (8 Equal Assets)
(Quoted from SBI Securities)
(REIT in expect Japan= 1/8, Emerging country stock= 1/8, Developed countries stock= 1/8, Developed countries bond= 1/8, Emerging bond= 1/8, REIT in Japan=1/8, Japan stock=1/8, Japan bond= 1/8)
So, after reading about these four types of funds, you may be wondering which you should choose.
My recommendation to invest in one World Fund. It is simple, easy, and profitable.
However, if you want to diversify into other types of investments, I recommend you additionally pick some other investments to reach your desired asset allocation
For example, I chose SBI- SBI All Country Stock Index Fund (a.k.a. Yukidaruma (All country)) and Mistubishi UFJ Kokusai- eMAXIS Slim All Country (3 Geographical equality type), and I split my investments between them.
I hope this article helps your decide on which funds to choose for your Tsumitate NISA!