CEO's Message & Our Management Philosophy

July 2024 marked a historic milestone with the 34-year record highs of the TOPIX index, following the Nikkei 225 index. The Japanese stock market remained at high levels until the Bank of Japan raised short-term interest rates in the midst of a heat wave, triggering a sharp decline that was reminiscent of Black Monday in 1987. The rise in interest rates caused the foreign exchange rate to turn around and the rapid appreciation of the yen also contributed to the market decline. What is noteworthy of the sharp market decline was the investment behavior of individual investors who bought stocks to take advantage of the market decline.

The revamp of the NISA system from January 2024 saw the tax exemption period being extended to the lifetime of the investor and tax exemption limits being raised. Along with the spread of financial education in Japan, this has led individual investors to take a proven approach to investment, based on the principles of "long-term, accumulation and diversification". I believe this movement has given confidence to the Japan Financial Services Agency (FSA), as well as other bodies involved in the shift toward making Japan an "Asset Management Nation". I hope they will continue to implement measures that are effective in revitalizing the investment chain, even if it takes time, rather than short-sighted measures that only appeal to supply and demand and appear to have an immediate effect.

As of early September, we are experiencing a stock market decline that appears to be a second bottom. Although there are uncertainties such as geopolitical risks and the upcoming elections in Japan and the U.S., the market is not overvalued in terms of fundamentals and is at a level that can be logically explained. Therefore, we believe there is a strong possibility that, as we saw with Black Monday, the market will reach a new high in the months following this second decline.

In line with Japan's commitment to increase stock market participation options for individual investors, 2024 can be viewed as the "first year of asset management" with more growth to come. During the summer, when the market was experiencing extreme volatility, not only our company, but the whole of Japan was greatly encouraged by an incredible athlete - a professional skateboarder, Yuto Horigome. His own philosophy/ values resonates with our motto as an active investment management company: "Be Active. A single step can change the future," and we are proud to say he has also featured in our communications since 2022. Moreover, in April 2024, Mr. Horigome and we signed an affiliation contract. The amount of inspiration, courage and passion that our staff have received from his achievements is immeasurable. Taking inspiration from his attitude that embodies the motto, "Be Active", Sumitomo Mitsui DS Asset Management will strive to become an unrivalled asset management company that contributes to people’s quality of life, keeping in mind our core values of Sincerity, Agility, Challenge, Passion, and Teamwork.