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5G is boosting lacklustre stocks market in Japan

(Image credit: © Sumitomo Mitsui)

 Japan may be caught up in an ongoing trade war, with a weakened market, but that hasn’t stopped 5G stocks from dominating. Investors seem to have every confidence in the emerging stocks, so much so that they are already making gains.

Sumitomo Mitsui Trust Asset Management Co.’s Next Generation Connectivity Fund, nicknamed “The 5G”, has done particularly well. Total net assets have risen a huge 40% in just four months to $3.5bn (£2.8bn). This is huge considering Japan’s market and it doesn’t stop there. “The 5G” fund has already returned 19% this year, beating almost every other fund. 

“An attractive investment area”

Analysts have been supportive of 5G technology, and its promises of 100x faster speeds and almost non-existent lag. The new technology will boost so many markets from mobiles to gaming. Stocks are already seeing the impact but 5G certainly hasn’t peaked yet. 

Hirochika Oono, executive officer at Sumitomo Mitsui Trust AM predicts that 5G will be “an attractive investment area for a long time”. This certainly does seem the case as Japanese investors appear to be in it for the long-haul.

 2020: The year of 5G

Major mobile carriers in both Japan and across the world are planning to completely roll out 5G in 2020. In fact, the technology is going to be shown-off at the Tokyo Summer Olympics, another reason why Japanese investors cannot resist 5G stocks. 

Japanese technology company, Lasertec Corp., has already more than doubled its share price this year, all because of the demand for 5G. Furthermore, Advantest Corp. has climbed over 20% this year due to the demand for 5G-related semiconductor testers. This demonstrates how 5G is going to boost so many stocks from technology, entertainment, mobile, gaming and even healthcare. Companies will have so many opportunities to utilize the new technology to their advantage.

Katsuyoshi Sakase, a general manager of the equity research department at Aizawa Securities Co. sees a bright future ahead for Japanese stocks and claims that “there will be new winners."

Fiona discovered her love for investing and making money from a young age. Since then this interest has grown and now she loves writing about investing and business, and follows the 5G market closely. She is also a technology enthusiast, and so they tend to be her favourite investments.