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."