SBI iDeCo funds portfolio. Anyone willing to help?

[sutebayashi]

I am no expert, but I based my approach on a book about passive, broad-based index investing that I read a few years back. I’ll tell you if it worked 20 years from now!

The first step it had was recommending the allocations per asset class, depending on the risk one wishes to take.

The second was selection of funds / etfs that provide the desired exposure to each asset class.

For this reason I don’t like balanced funds. If I know the balance I want I can select funds for each slice by myself. A balance fund may be a little pricier for this reason? Does the balance fund give you something you cannot easily get for yourself?

For iDeCo this certainly applies because you are free to rebalance the funds as you wish. I’ll probably look to rebalance my iDeCo once a year, but not more than that.

I can think of making an exception for balance funds in case of NISAs, for which you can’t manually rebalance funds without using up a chunk of your annual tax free investment quota.

In my case however, I am not maxing out my investment quota on a monthly basis anyway, so I don’t mind eating up some unused quota by selling outperforming funds and buying underperformers to rebalance.

In short, if you want say 5% Japanese equity exposure, is there a reason to get that through a balance fund, rather than a plain simple Japanese equities fund? Same for each of the components in the balance fund. If you don’t even want to be bothered manually rebalancing once a year, perhaps that could justify it.

[ivanpgs]

I think it’s fine because it’s build around allocations to global equity while including some exposure to Japanese equity through the balanced fund. But I think some forum members will recommend you to select cheaper — or the cheapest — funds.

The decision regarding how much fees you’re willing to take on is a personal one. You would be able to decrease the fee level by putting in the Nissay foreign equity fund for one of the SBI EXE-i funds.

It will probably still take a week or 10 days to rebalance the portfolio because of the time it takes to process and finalise the order. Adjusting the iDeCo portfolio won’t be like buying stocks, where the order goes through right away.

短期資産 are short-term assets —> cash holdings. They would be used by the investment management company to rebalance the fund.

After thinking about the fees again I will go for the next approach:

*** FOREIGN COUNTRIES STOCKS FUND ***

Allocation percentage: 50%.
Fund name: EXE-i 先進国株式ファンド
Fee: 0.3244

*** BALANCE FUND ***

Allocation percentage: 50%.
Fund name: ＤＣインデックスバランス（株式6０）
Fee: 0.2052

I have read very good reviews about the Vanguard funds and with the EXE-i Developed Countries Equities Fund (先進国株式ファンド) I can invest in them, plus the fees are affordable.

And as I commented before, the Japanese market could do a couple of good years until the Olympics ends, so the balance fund ＤＣインデックスバランス（株式6０）with 45% in Japanese equities, plus 15% in US equities and some defensive bonds (25% Japan and 10% US) can be a good option. I can also rebalance it in the future changing it for the same family but less dependent on stock market , using the ＤＣインデックスバランス（株式2０）or changing the strategy and switching it for bonds.

As it is my first experience on this I will wait and see for some months how is everything going.

[ivanpgs]

In short, if you want say 5% Japanese equity exposure, is there a reason to get that through a balance fund, rather than a plain simple Japanese equities fund? Same for each of the components in the balance fund. If you don’t even want to be bothered manually rebalancing once a year, perhaps that could justify it.

Thank you for your advice. I think that is also a valid approach, but after having a look at the fees, it seems that even the cheapest Japanese equities funds´fees (0.2592 or 0.2700) are even higher than the balance fund (0.2052). But, it could be easier to rebalance when the time comes, as you said.

I will likely try the approach I mentioned in the post below and see how it works. But thank you very much for taking your time to explain about your experience so far and for the advices

[ivanpgs]

so I can think to change the strategy if things get worse in future (sell to save the cash for sometime or go to bonds, etc).

Trying to time the market is generally difficult. By the time you realise things are getting worse you would probably take a loss by selling. Probably a better idea to stick to your starting strategy. Or if you think you know which way the market is going, increase your holdings in bonds etc. by diverting a higher percentage of your payments into them, not by selling shares.

Yes, that´s right. The 2007-2008 crash got me inside of the market and I was swept away with a lot of stocks. So now I know that I need to be careful. But as my first strategy is being like 70-80% in equities, I will need to increase my holding in bonds as you were suggesting or perhaps switching the balance fund to be less tied to equities, from 60%, to 20%.

Thanks for the advice, Jamo.

[ivanpgs]

Long time no write here!

I applied for SBI IDeCo on 16 December 2017, received a call a week later just to confirm how to handle my two surnames (yeah, I am Spanish), because they do not accept spaces, so I told them to put them together as one. I took advantage of the call and asked them for a rough estimate on when I would likely received the acceptance letter for the iDeCo and they told me that around mid February.

On February 15th. I received a letter with my user, password and the page to use the SBI iDeCo service (https://www.benefit401k.com).

In that page they have three important fields:

現在の資産残高: 0円 (current investment/asset balance)
現在の掛金: 23,000円 (current contribution (monthly)
掛金拠出予定日: 2018/03/14 (next contribution scheduled day)

As I did not choose any funds yet for my monthly contribution, there was one selected by default. It was a non risk 1 year deposit called "あおぞらＤＣ定期（１年）" with a fixed return of 0.02% each year.

I was thinking what should be my portfolio for one week and I finally decided to go with the next one:

70% -> ＤＣインデックスバランス（株式６０）Fund annual fee: 0.19%
-> http://www.benefit401k.com/ja/customer/ ... 191277.pdf
30% -> ＥＸＥ－ｉ　先進国株式ファンド- Fund annual fee: 0.3184%
-> http://www.benefit401k.com/ja/customer/ ... 198997.pdf

Having a look at both funds configuration, my assets would be split into something like the following:

- Japan equities: 31.5%
- US equities: 28.5%
- Europe equities: 9%
- Asia equities (excluding Japan): 3%
- Japan bonds: 17.5%
- US bonds: 7%
- Cash: 3.5%

I decided not to go with the emerging market fund ＥＸＥ－ｉ　新興国株式ファンド. Fund annual fee: 0.3794%
-> http://www.benefit401k.com/ja/customer/ ... 199197.pdf

Just wanted to share with you all my first private pension plan. I know it might not be the best moment in markets to get in, but let's see