S&P500 vs. Nikkei 225 & All-Country Indexes: A Deep Dive
On the JBpress YouTube program, “Taito & Yuna’s Money Survivor,” money consultant Taito Taito and vocalist/MC Yuna Yuna explore the wisdom and skills needed to navigate life’s financial challenges. Since the launch of the new NISA (Nippon Individual Savings Account), the investment strategy of simply choosing an ‘All-Country’ (オルカン) fund has gained popularity. With the Nikkei Average hovering around record highs, exceeding 50,000 and approaching 60,000, recent geopolitical uncertainties, such as the US attacks in Iran, have increased market volatility. This has led many investors to question whether an ‘All-Country’ approach is truly the best option.
In this article, we’ll conduct a thorough comparison of the Nikkei Average, TOPIX, All-Country, and the S&P500. You can find a more detailed explanation, including charts and graphs, on the official JBpress YouTube program, “Taito & Yuna’s Money Survivor.” (Recording date: February 19, 2026)
The Rising Nikkei and the Volatile US Market
Yuna Yuna: With expectations for the Kishida administration as a tailwind, the Nikkei Average is performing strongly. However, the US stock market has been experiencing significant fluctuations due to concerns about an AI bubble. I’ve been solely investing in All-Country, but is this still the right approach?
Taito Taito (Money&You Representative): Since the launch of the new NISA, which of the Nikkei Average, All-Country, and S&P500 has delivered the best performance?
Yuna Yuna: Everyone has been talking about All-Country, so I assume it’s the most popular choice.
Taito Taito: Surprisingly, the Nikkei Average has actually outperformed both All-Country and the S&P500 since the launch of the new NISA. All-Country tracks the MSCI ACWI (All Country World Index), so we compared it to that benchmark.
Performance Comparison: 3, 5, and 10-Year Returns
Looking at 3, 5, and 10-year comparisons, the Nikkei Average consistently offers the highest total return. Yuna Yuna noted that the All-Country fund has a lower annual risk, which was unexpected.
Taito Taito: Even when considering risk efficiency (return relative to risk), the Nikkei Average proves to be superior. When Japanese investors invest in All-Country and the S&P500, it’s crucial to account for currency exchange rates. Let’s compare based on investment trust (fund) performance within the NISA framework.
We used the benchmark prices for the following funds: eMAXIS Slim Domestic Equity (Nikkei Average), eMAXIS Slim All-Country World Equity (All-Country), and eMAXIS Slim US Equity (S&P500). We indexed the values to 100 as of January 4, 2024. The Nikkei Average initially lagged but has recently experienced rapid growth, particularly after the recent House of Representatives election.
Considering a long-term perspective, we also compared the 3 and 5-year total returns, risk, and risk efficiency of each investment trust. The Nikkei Average performed well over 3 years, but the 5-year returns for All-Country and the S&P500 are higher due to the weakening yen. Ultimately, the best index depends on your investment horizon and risk tolerance. However, if you want to grow your investments steadily without taking on currency risk, Japanese stock indexes are a viable option.
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Disclaimer: Investment involves risk. Past performance is not indicative of future results. Consult with a financial advisor before making any investment decisions.
