Exchanging GBP or USD to start SBI NISA

[northSaver]

I'm thinking of taking advantage of the currently high GBP.JPY and USD.JPY exchange rates by moving cash from my IB account to an SBI Regular NISA account (120 man yen). My wife already has an SBI Tsumitate NISA account but I don't have one yet, so this could be a good time to start. I'm hoping to buy just a couple of ETFs or funds to keep it simple. So here are my questions:

1) Is there anything on SBI that invests in high dividend yield Japanese stocks? Something like ETF 1478 (iShares) that tracks the MSCI Japan High Dividend Yield Index?

2) Is there anything on SBI that invests solely or mostly in inflation-linked Japanese bonds (JGBi)?

3) Does anyone agree or disagree with this strategy? I'm hoping that the above funds will be the same price or higher in five years' time, and they will generate decent inflation-beating yield each year. On the minus side, interest rates will probably rise rapidly in the US and UK from now, so cash will generate yield too. And the exchange rates could go much higher than they are now. But... it's only 120 man so not the end of the world if the strategy backfires.

[northSaver]

I'm thinking that my first two questions were too specific, so I'd like to change them. Actually I've given up on the JGBi idea because I can't find an ETF that includes them. So:

1) Is it true that you can buy just about any stock or ETF that's listed on the Tokyo Stock Exchange in a regular NISA account? Or does the list vary a lot by provider?

2) The ETF I want is distributing, so can I assume that the dividends will continue to be tax free even if the value of the account is greater than 120 man (due to the ETF price rising)?

3) Can I reinvest the dividends if the value of the account is less than 120 man (due to the ETF price falling)? Or does it depend on the total amount you invested in the current year, not on how much the account is worth?

Sorry for the questions. I max out my iDeCo but am pretty new to NISA. Thanks in advance.

[zeroshiki]

There's alot of info in the wiki: https://retirewiki.jp/wiki/NISA

1. No, it varies by provider some things you cannot buy on NISA (you can buy most).
2. The NISA limit is on purchase price. It doesnt matter what happens to your funds while its in the NISA account.
3. Because the NISA limit only cares about the purchase price, if your ETF loses value, you cannot "make it up". This is why its not really recommended to put funds that don't re-invest dividends internally into NISA since you cannot reinvest yourself without using up your limit.

Is there a reason you want to use ETFs over mutual funds? In Japan, MFs are generally preferred over ETFs for the retail investor: https://retirewiki.jp/wiki/Japanese_glo ... th_US_ETFs

[northSaver]

Thanks zeroshiki. Yeah, I saw the wiki and it said (on the comparison page) you can buy "Listed stocks, funds, ETFs, REITs" in a Regular NISA account. I just wasn't sure what "listed" meant in that context. Like... listed on an exchange? Or just a list of that provider's offerings, which varies between providers? I guess I'll just have to make an account with SBI and see if the ETF I want is there or not. Unless there's a way to preview the list beforehand?

The info about the dividends makes sense, thanks. I'm pleased they'll be tax-free for five years.

Why an ETF? The one I want (1478) is domiciled in Japan and contains only Japanese stocks, so I don't need to worry about foreign holding tax and currency conversion cost in this case. If there's a similar mutual fund available with lower fees, or which offered accumulating dividends instead of distributing, then I would buy that instead.

[zeroshiki]

There seems to be a fund tracking the MSCI Japan High Yield Dividend index here: https://www.rakuten-sec.co.jp/web/fund/ ... 90C000DBF5

But it distributes "dividends" twice a year (there's also a monthly version) and the fee seems extortionate.

[adamu]

Thanks zeroshiki. Yeah, I saw the wiki and it said (on the comparison page) you can buy "Listed stocks, funds, ETFs, REITs" in a Regular NISA account. I just wasn't sure what "listed" meant in that context. Like... listed on an exchange? Or just a list of that provider's offerings, which varies between providers? I guess I'll just have to make an account with SBI and see if the ETF I want is there or not. Unless there's a way to preview the list beforehand?

For domestic stocks, anything listed on the Tokyo Stock Exchange.

For domestic funds, here is the list: https://site0.sbisec.co.jp/marble/fund/ ... m7=other_2

For international stocks, here is the list: https://search.sbisec.co.jp/v2/popwin/i ... 0_etf.html

The above info taken from here: https://site1.sbisec.co.jp/ETGate/WPLET ... ineup.html

[northSaver]

Thanks adamu. Very useful links.

The domestic fund list doesn't seem to have what I want, though they do have the fund that zeroshiki found (MSCIジャパン高配当利回りインデックス・ファンド) which, as he says, is not really suitable. The fee is 0.89%!

However, on the third link next to "NISA口座の対象商品" [Products available to NISA] it says: "国内株式（国内ETF、REIT、ETN、単元未満株（S株）も含む）" [Domestic shares (including domestic ETFs, REITs, ETNs, and shares less than one unit (S shares))].
Since 1478 is a domestic ETF - listed on the TSE - then surely it will be included!? I don't know exactly how to confirm this but I think I'll assume it will be there when it's time to buy. If it isn't, I'll buy a normal domestic stock ETF/MF instead.

Thanks guys, you've been very helpful

Edit: I messed up the ETF name. It's 1478 (not 1487). Shame they don't have more memorable ticker symbols on the TSE! The full name is "iShares MSCI Japan High Dividend ETF" [iシェアーズ MSCI ジャパン高配当利回り ETF].

[Tkydon]

The domestic fund list doesn't seem to have what I want, though they do have the fund that zeroshiki found (MSCIジャパン高配当利回りインデックス・ファンド) which, as he says, is not really suitable. The fee is 0.89%!

O.89% is very much on the Low Side - Given not as low as some; 0.22%~, but nowhere near the higher management fees of 1.8%~

[northSaver]

O.89% is very much on the Low Side - Given not as low as some; 0.22%~, but nowhere near the higher management fees of 1.8%~

I dunno. If the yield is 2.45% (which it currently is for ETF 1478), then a fee of 0.89% results in a whopping 36% reduction of yield income. 1478's fee is 0.21%, which is only about 9% of the yield. Granted, it's not a massive cash difference on 1.2 million yen, but as a matter of principle I try to avoid fees over 0.5%.