This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Funds Shop in Japan, the Wal-Mart of Markets

NEW YORK ( TheStreet) -- At a time when markets around the globe have been soaring, Japan remains mired in a slump. Japan funds have lost an annual average of 3.1% in the past five years, the only foreign category that has declined, according to fund-research firm Morningstar.

Plenty of analysts think the lackluster performance will continue. But some value-seeking fund managers have been bargain shopping. Funds that are overweighting Japan include First Eagle Global (SGENX), Tocqueville International Value (TIVFX) and BlackRock Global Allocation (MDLOX). "Buying stocks in Japan is like shopping at Wal-Mart (WMT)," says Abhay Deshpande, portfolio manager of First Eagle Global, which has 30% of its assets in Japanese stocks. "Everything is cheap, and even the brand-name stuff is on sale."

To be sure, the outlook for Japan's economy remains bleak. Spending heavily on projects that could stimulate the economy, the government racked up big deficits in recent years. But all the expenditures failed to ignite an economic boom. Many economists now believe gross domestic product will languish, growing perhaps 1% annually for the next five years.

Part of the problem can be traced to demographics. In a country with little immigration and small family sizes, the population is aging. The country is saddled with the need to support a growing group of retirees. Forecasters say the population will begin shrinking, which could lead to lower demand for consumer products of all kinds.

But not all companies seem destined to stagnate, fund managers say. While businesses that serve the domestic-consumer economy are struggling, Japan remains home to world-class industrial exporters. Those businesses have been achieving healthy sales by exporting to China and other emerging markets. "Most of my Japanese holdings right now are exporters," says William Kennedy, portfolio manager of Fidelity International Discovery (FIGRX), which has 18% of assets in Japan. "Japanese companies are supplying the high-tech machinery and the equipment that is necessary for the boom in China."
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KUB $0.00 0.00%
AAPL $110.29 -0.92%
FB $92.37 -0.46%
GOOG $640.34 -0.79%
TSLA $234.60 -2.80%


Chart of I:DJI
DOW 16,871.90 +81.71 0.49%
S&P 500 1,987.35 +7.43 0.38%
NASDAQ 4,763.4260 +15.0650 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs