A specialist exchange-traded fund (ETF) manager has predicted the strong performance Japan delivered in 2025 is set to continue this year and is one market to which investors should consider a portfolio allocation.
“Japan was a fantastic performer last year, [delivering] double-digit returns last year and we think this can continue because we think this is a real structural shift,” Global X senior product and investment strategist Marc Jocum told attendees of a recent investing webinar.
“Japan has gone through years and years of deflation, so the complete opposite of what everyone else has been going through, and right now it is seeing inflation coming back, which is not a bad thing.
“It’s good for real wages, it’s good for a range of different things and I think a lot of people who hadn’t really superseded that 1989 peak of the Japanese market now might be in for a really strong bode of structural reforms across both a macroeconomic perspective, from a microeconomic perspective, [and] flow coming into Japan.”
According to Jocum, the situation in which many people in the country find themselves also has positive implications for the Japanese economy and market.
“There is such a high percentage of consumers or households that have the bulk of their money in cash [and] there are a lot of incentives for that cash to get put to work and put into the equity market,” he said.
“I think that you might start to see some of that cash component move into areas [such as] fixed income, equities and ETFs. [Previously] the Bank of Japan was the [party] that was buying all the ETFs in [the country], but I think will slowly start to change.”
Further, he pointed out Japan’s earnings per share growth has kept pace with the United States and that performance is being generated by reasonably priced stocks.
In addition, he acknowledged an allocation to shares in these corporations will give exposure to broad global innovation, broad global supply chains and the growing artificial intelligence sector.
Global X launched its Japan ETF offering in December 2025.