Benchmark, expense ratio, other costs, tracking difference, size, distributions, currency, and NISA eligibility — and why recent performance is not enough.
Compare funds on benchmark, total cost, tracking difference, assets under management, distribution policy, currency/hedging, and NISA eligibility — not on last year’s return, which is an unreliable guide to future relative results.
Begin with the benchmark. A fund tracking the S&P 500 and one tracking a global all-country index are answering different questions; comparing their returns directly is meaningless. Confirm what index each fund follows and whether that exposure is what you want.
Then compare total cost, not just the headline trust fee (信託報酬). A fund’s full cost includes transaction costs, custody, any underlying-fund expenses (for funds-of-funds), bid-ask spreads, and tax leakage. Among competitive Japanese index funds, expense ratios are very low, so small differences compound over decades — but the cheapest fee is not automatically best if the benchmark, tracking, or structure differs.
Tracking difference is the fund’s return minus its benchmark’s return over a defined period — the practical measure of how faithfully it delivers the index after costs. Two index funds on the same benchmark can differ because of fees, tax leakage, cash holdings, sampling, trading, and benchmark conventions. Compare over matching periods and a consistent return convention.
Assets under management (AUM) matter: a larger, established fund is less likely to close or face operational strain. Check the distribution policy — many Japanese index funds retain and reinvest income, which suits long-term accumulators — and the currency/hedging policy, since unhedged foreign funds carry exchange-rate risk.
Confirm NISA eligibility by exact fund name and share class against the FSA list and your broker, and check the fund can be bought automatically in the allowance you intend. US taxpayers must add a separate PFIC step regardless of Japanese eligibility.
Only after all of that should you look at historical performance — and then only against the benchmark over matching periods. Choosing "last year’s best fund" is the classic mistake: recent outperformance is an unreliable predictor of future relative returns, and a top-ranked fund can lag the next year. Use performance to check that a fund is tracking its index sensibly, not to rank funds against each other.
Brokerage (NISA/iDeCo) · Rakuten Securities
A leading low-cost brokerage for NISA and index-fund investing, integrated with Rakuten points and Rakuten Bank.
Fees: Many domestic funds and trades are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · SBI Securities
Japan’s largest online brokerage by accounts, with a very broad low-cost fund lineup and full NISA/iDeCo support.
Fees: Many trades and funds are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · Monex
An established online brokerage often chosen for US-stock access and research tools, with NISA and iDeCo support.
Fees: Commissions vary by product; some funds/trades are low-cost — verify current schedule.
This is education, not a recommendation. Most beginners research low-cost, broadly diversified index funds — for example all-country (全世界株式) or S&P 500 trackers — rather than picking individual stocks, because low fees and diversification are within your control while returns are not. Understand that values fall as well as rise, match the risk to your time horizon, and never invest money you may need soon.