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Noriyuki Morimoto's Blog

On Not Finding any Attractive Investment Trusts in Japan

May 22, 2017
byNoriyuki Morimoto

A short while ago, I attended a gathering of industry peers at which a representative from a major asset management company delivered some words that I would not forget. What he mentioned was about the current state of Japan’s investment trust industry: “The biggest problem is that there are absolutely no products that we as professionals would want to buy”. This is very true, precisely pointing to what‘s wrong with Japanese investment trusts. But at the same time, it’s not. It’s ethically wrong if the representative of a manager of investment trusts can offer things he doesn’t want to invest in with a straight face to his customers. Before discussing the problem with investment trusts, it’s against business ethics. Whatever you sell, whatever its value measured by your clients, you have to have confidence in its benefits in order to make the business an ethical foundation. An economically viable business is established only on top of this ethical foundation, and when the value of the product from your and your clients’ perspectives match at some point. Investment trusts are not an exception. Many people have special attachments to certain hobby items, such as audio equipment, cars, motorcycles, or cameras, and they are likely to be supporters of certain manufacturers. Those manufacturers might be the ideal workplace for them. There is no joy above creating things you love, and earning a livelihood by selling them with confidence to your customers. The people who purchase such products naturally share values with the people who sell them. A business built on top of this kind of relationship is a source of long-term sustainable profits: it is a classic case of commerce at work. Of course, businesses do not generate sustainable profits for being ethical. They do so because they realize a shared value with the customer. The realization of shared value with the customer forms an ethical base that makes the business sustainable. In other words, commerce is not equal to ethics, but there should be no commerce that runs against ethics. Coming back to Japanese investment trusts, they are unlikely to be sustainable given that they are contradictory with business ethics. This is one reason the Japan Financial Services Agency launched a major overhaul for investment trusts to become a commercially viable product. It is only natural that the core measure is thorough implementation of fiduciary duty.

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Updates

Mar 20, 2017
byHC Asset Management

Our CEO Noriyuki Morimoto contributed an article to 20 March issue of Weekly Financial Affairs

 

Our CEO Noriyuki Morimoto wrote “What does the merger between Trust Companies of Mizuho Group and Mitsui Sumitomo Group lead to?” for 20 March issue of Weekly Financial Affairs

Mar 10, 2017
byHC Asset Management

Our CEO Norinyuki Morimoto contributed a chapter in the textbook for Kinzai’s remote learning program. Kinzai is a leading Japanese publication specialised in finance.

 

Our CEO Noriyuki Morimoto wrote the 1st Chapter “What is fiduciary duty?” for Kinzai’s textbook “Practical Application of Fiduciary Duty Principles”

Feb 01, 2017
byHC Asset Management

Our CEO Noriyuki Morimoto contributed an article to the February issue of Monthly Energy Forum

 

His article “[TEPCO] should strive to become a top global energy utility.” was one of the feature articles for “Big Bang after dismantling of TEPCO”

Dec 02, 2016
byHC Asset Management

Our CEO Noriyuki Morimoto spoke at "Insurance Risk Management Conference 2016" organised by Moody's Analytics

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