eMaxis Slim All Country vs Sony Life Sovani

[D33]

Hi everyone,

First time post here. I'm thinking of buying eMaxis all country through tsumitate NISA but my brother in-law is trying to get me to buy Sony Life's Sovani. It's technically a form of Life Insurance but closer to an investment fund. There is an all country option but it's active and the management fees are about 1.5%.
He's saying that these fees are warranted because of how well the fund is performing.

I'm a beginner here so apart from the management fees are there any other reasons to choose eMaxis?

Thanks!

[beanhead]

He doesn't know what he is talking about.
Ignore him and take the average returns of the market.

[sutebayashi]

There is an all country option but it's active and the management fees are about 1.5%.
He's saying that these fees are warranted because of how well the fund is performing.

Ask him if it is outperforming what the eMAXIS fund invests in by more than 1.5% each year, for how long it has, and what guarantee there is that it would continue to do so in future.

If he says “yeah but there is life insurance in it too”, then you might ask why you should mix life insurance and investing vehicles together, rather than keep them separate so that you can more easily discern the costs of each.

If he has a convincing answer then you should do as you please, but I guess he won’t be able to give you a good answer. You married his sibling, not him, so you should be able to go separate ways on this if necessary!

[adamu]

These life insurance plans are usually very expensive and for the benefit of the provider, not the customer. That's also why they pay out large commissions to people that convince new suckers to join, and probably why your brother-in-law is so keen to get you to sign up

There are unlimited articles online about how recent performance is not a good reason to buy actively managed funds, and why you'd be better picking an index fund. Here's one.

https://monevator.com/is-active-investi ... -sum-game/

I notice that they have an MSCI Kokusai (developed markets ex. Japan) fund by Mitsubishi UFJ, which is effectively the same fund as ｅＭＡＸＩＳ Ｓｌｉｍ 先進国株式インデックス, however the eMaxis slim fund costs 0.1023％ - not sure how many times more expensive it is in that insurance wrapper.

[JimNasium]

Does anyone have a good link in Japanese explaining why these are a bad idea?

[sutebayashi]

Does anyone have a good link in Japanese explaining why these are a bad idea?

I guess “bad idea” might be a little strong (it is probably better than nothing), but there are better ideas, so it is relative.

These links look like they would be along the right lines:
https://manetatsu.com/2020/11/306459/
https://www.hokende.com/columns/magic-lesson/27

They are assuming the case of someone for whom life insurance is necessary, but advise going with “kakesute” throw-away insurance to cover your risk of death, and invest your money via low cost tsumitate NISA etc.