Mutual Funds Marketplace
Products
The Mutual Fund Marketplace
The IBSJ Advantage
- Fund your NISA with a curated selection of GNISA and ANISA-eligible mutual funds
- Interactive Brokers Securities Japan, Inc. is neutral and does not offer proprietary mutual funds
No Commissions or Custody Fees on Japanese Mutual Funds
Risks Associated with
Mutual Funds
Mutual funds allow for small and diversified investments, and investment decisions are made by experts familiar with economic conditions and market trends. Mutual funds also reduce the hurdle for individuals investing in overseas and special products. In principle, trading prices are announced daily, making it easy to understand asset values and price movements, and they are highly transparent financial instruments.
However, since mutual funds invest in stocks, bonds, and other securities subject to price fluctuations, their Net Asset Values (NAVs) are subject to changes in the market and other factors. Therefore, there is no guarantee of principal in investment trusts, and the following risks are associated with investment trusts.
The price of products traded in the market changes daily. Market supply and demand determine stock and bond prices but are affected by domestic and international political and economic conditions, corporate performance, and other factors.
Mutual funds are exposed to exchange rate fluctuations when they invest in foreign stocks and bonds. Changes in the currency exchange rate affect the yen-denominated value of the fund. Generally, a stronger yen negatively impacts the NAV, while a weaker yen positively impacts the NAV.
A mutual fund's NAV may decrease, or interest and redemption payments will not be paid under predetermined conditions due to the default or bankruptcy of a company or country included in the mutual fund.
Each mutual fund has distinct types and degrees of risk. When purchasing a mutual fund, it is important to read the prospectus and other information explaining the risks and to know and fully understand the risks associated with each mutual fund.
When purchasing mutual funds, it is important to understand what costs
are involved.
This fee is paid directly to the distributor at the time of purchase as a percentage of the subscription price. The management company sets the maximum fee for each fund, and the distributor determines the fee within that range. The fee may vary from distributor to distributor, even for the same mutual fund. Some funds and distributors do not charge this fee (no-load).
These fees are paid indirectly to the investment management company, distributor, and trustee company (trust bank) in proportion to the amount held in the mutual fund during the period the mutual fund is held. The annual percentage rate is published in the prospectus and other documents. Although the amount shown is the annual percentage rate, it is calculated daily and deducted from the trust assets to calculate the NAV.
Audit Fees are paid indirectly from the trust assets while the mutual fund is held. An auditing firm typically audits investment trusts at each fiscal year-end, and this fee is the cost of the audit.
A brokerage fee is paid indirectly from the mutual fund's trust assets. It is an expense incurred when the mutual fund buys and sells stocks and other securities. The fee is collected indirectly each time it is incurred. Since these fees vary depending on the frequency of asset replacement in the mutual fund and are incurred due to management, it is impossible to indicate in advance how much the fees will cost. This fee can be confirmed in the investment report.
This fee is separate from commissions and charged on some mutual funds when they are purchased or cancelled. The fee is retained in the trust assets, not the distributor. When a mutual fund is cancelled, the stocks, bonds, and other assets invested in it are sold, resulting in redemption fees and losses on sales. These costs are borne by the seller, thereby preserving the assets of the beneficiaries who continue to hold the trust.
A fund of funds is a mutual fund that invests in multiple mutual funds. As a result, double costs are incurred by the mutual funds purchased and in which they invest. Most fund-of-funds products calculate the "actual trust fee ratio" including the trust fees of the investment trusts in which they invest, and include it in the prospectus, so that you can check the amount of various fees in the management report.
Mutual Fund Distributions
There are two types of distributions for Mutual Funds: Ordinary Distributions and Principal Distributions (aka “Special” Distributions).
The type of distribution depends on your own unrealized PL, and they have different tax treatments as well. Depending on the NAV at which you subscribed to the fund, the NAV at the time of distribution, and the distribution size, some or all of the distribution may be considered taxable profit and/or may reduce your investment principal.
Ordinary Distributions
These are paid out of trading profits/dividends/interest/etc. If the NAV after distribution is equal to or greater than your principal, then the entire distribution is considered Ordinary and is taxable as dividend income.
Principal Distributions
These are paid as a cash distribution by partially reducing your principal amount. If the NAV after a distribution is less than your principal, it is considered a refund of principal; your principal will be reduced, and the distribution is not taxable as it is not considered “profit.”
Free Mutual Fund Search Tool
Use our Mutual Fund Inventory Search Tool to identify funds by country of your residence, commission charged, fund type or fund family.
Smart Investors Never Stop Learning
Level up your market knowledge and learn about investing with over 65 free online courses on Trading, Stocks, Options, Futures, Technical Analysis and much more.
Start trading like a professional today!
Open an AccountDisclosures
Mutual Funds are investments that pool the funds of investors to purchase a range of securities to meet specified objectives, such as growth, income or both. Investors are reminded to consider the various objectives, fees, and other risks associated with investing in mutual funds. Please read the prospectus accordingly. This communication is not to be construed as a recommendation, solicitation or promotion of any specific fund, or family of funds. Interactive Brokers may receive compensation from fund companies in connection with purchases and holdings of mutual fund shares. Such compensation is paid out of the funds’ assets. However, IBKR does not solicit you to invest in specific funds and does not recommend specific funds or any other products to you. For additional information please view our Mutual Fund Product Listings.
Mutual funds trade once per day. Each fund has a cut off time, after which an instruction to buy or sell cannot go through until the next day. Any attempt that you make to cancel or modify an order will be considered a request to cancel or modify that order. We will do our best to meet your request but cannot guarantee that your order can be changed or cancelled, even where the request is submitted before the cut off time. We shall not be liable to you if we are unable to cancel or modify an order. You remain responsible for executions even where you have made a request to cancel or modify an order.