It seems like every week there is a new ASX ETF hitting the market.
These often become increasingly niche as ETF providers and investors seek to capitalise on themes or sectors that haven't been combined into a single fund.
On Monday, the team at GlobalX announced the newest fund: The Global X Japan TOPIX 100 ETF (J100).
Image source: Getty Images
Why invest in Japan?
I covered last week that data from October shows there were record-breaking inflows in Japanese stocks in October.
Investors are looking to capitalise on normalising Japanese inflation, sweeping economic reform, and meaningful alignment with booming global sectors like AI, EVs, and energy transition.
It might surprise Aussie investors to discover that in 2025, the TOPIX Index (major index for the Tokyo Stock Exchange) is outperforming the S&P 500 Index (SP: .INX) and the S&P/ASX 200 Index (ASX: XJO).
According to Global X, after years of stagnation, the perception is beginning to shift on Japanese stocks.
For the first time in decades, Japan's equity market is not only displaying signs of growth but also of transformation, as long-standing cultural and financial barriers give way to a more dynamic and shareholder-focused era.
The Global X Japan TOPIX 100 ETF (J100)
The Global X Japan TOPIX 100 ETF (J100) tracks the TOPIX 100 Total Return Index. This is a subset of the broader TOPIX (Tokyo Stock Price Index). It represents the 100 largest and most liquid companies on the Tokyo Stock Exchange.
Essentially, it provides exposure to Japan's largest and most established companies. This spans across sectors such as technology, industrials, consumer goods, and finance.
At the core of this fund is the aim to harness the tailwinds associated with Japan's structural shift away from decades of deflation toward a more normalised inflation environment.
According to Global X, a return to normalised inflation has far-reaching benefits for Japan's economy.
Moderate price growth encourages firms to (or unions to demand) raise wages, which in turn supports consumption and domestic demand.
For corporates, this environment often translates into stronger revenue growth, which in turn can be monetised through healthier margins, leading to rising earnings.
This shift could be especially significant in Japan, where households remain among the most under-invested globally, holding around 51% of their assets in cash and deposits and just 18% in equities or investment trusts, compared with 12% and 55% respectively in the United States.
Diving deeper
The J100 ASX ETF includes 100 holdings.
Its largest weighting by sector is to:
- Industrials (25.9%)
- Consumer Discretionary (17.4%)
- Financials (17.3%)
By individual company:
- Toyota Motor Corp (5.1%)
- Sony Group Corp (4.5%)
- Mitsubishi UFJ Financial Group Inc (4.5%)
The fund will likely compete with similar funds:
- iShares MSCI Japan ETF (ASX: IJP) – The fund is designed to measure the performance of Japanese large & mid-capitalisation companies.
- BetaShares Japan ETF – Currency Hedged (ASX: HJPN) – The fund aims to track the performance of an index (before fees and expenses) that provides diversified exposure to the largest globally competitive Japanese companies, hedged into Australian dollars.
