True Impact Investing Is Achieved Through Active Management | The Essence and Future of Investing

In today’s society, the concept of investing is no longer limited to a select few wealthy individuals.
Driven by the launch of the New NISA and concerns about the future, many ordinary people are now embarking on asset building.

However, the current trend shows that many are gravitating toward index investing, prioritizing low costs and efficiency.
Of course, there is nothing wrong with building assets efficiently.

However, the true thrill of investing and its power to change society lie not in passive management, but in active management.

Real-life experiences as ordinary people generate and sustain the driving force behind investing

When people hear the word “investing,” many may picture rows of numbers on a monitor, complex charts, or macroeconomic trends.
In pursuing long-term investment returns, the most rational and reproducible method is actually extremely simple.
It involves using the following criteria: whether the services or products a company provides are indispensable to our daily lives, and whether we hope to continue using them well into the future.
It is this “desire of the consumer” that serves as the purest and most powerful source of energy for investing.
When we decide to support a specific company and continue using its services, we create a solid foundation of demand within society.
Where there is demand, business thrives, and companies can achieve healthy growth.

Corporate growth generates profits, which are ultimately returned to investors in the form of rising stock prices and dividends
There is no speculative gambling involved in this cycle.
It is an extremely down-to-earth process grounded in the real economy.
The reason we can maintain a long-term perspective without being swayed by short-term market turmoil or temporary stock price declines is that our investment decisions are rooted in our own lived experience as consumers.
It is this sense of conviction that fosters “strong investors” who remain unshaken even during market crashes.

The essence of impact investing lies in engagement that goes beyond simply providing capital

Recently, the term “impact investing” has been widely touted in the financial industry.
This is an investment approach that aims to generate positive, measurable social and environmental impact alongside financial returns.
However, simply pouring money into a list of “companies that seem to be doing good for society” will not generate true impact.
What is essential, therefore, is the process of “engagement” (dialogue and connection), through which investors and companies are bound by a deep relationship of trust.
Investors must adopt an attitude that views companies not merely as tools for generating profit or as “stocks” within a portfolio, but as irreplaceable public institutions that make up society.
Investors must be partners who resonate with the vision a company espouses and walk alongside it toward its realization.
They must engage in repeated dialogue with corporate management, offering tough advice at times and providing support during difficult periods.
Through this two-way communication, companies evolve into stronger entities that contribute more meaningfully to society.
The ability to build this “bond” is the true essence of investing, and it is this passion that brings about tangible change in society.
It is not merely about pumping the “blood” of capital, but about infusing the “soul” of the investor’s intent. That is the true essence of impact investing.

The Social Responsibility and Market Advantage of Active Management

Currently, index-tracking strategies—which aim to track market indices—dominate the market.
Certainly, it may be easy to achieve average returns by diversifying investments across the entire market.

However, index investing has inherent limitations.
Specifically, it involves only mechanically selecting investment targets, making it difficult to engage directly with companies.
Even if an index claims to prioritize “ESG” or “impact,” it merely buys and sells assets automatically based on predetermined scores.
It lacks a mechanism to evaluate a company’s unique vision or passion that cannot be quantified.

In contrast, active management involves investment professionals visiting companies in person, looking management in the eye, and sensing the atmosphere on the ground as they make investment decisions.
It is precisely this ability to “spot talent” that is necessary to identify the shining companies that will support the future of Japan and the world.
Furthermore, active management plays a role in correcting market distortions.
While many people stop thinking and simply invest in index funds, the presence of active managers who identify intrinsic value and act upon it promotes fair price formation, which ultimately leads to maintaining the health of capital markets.
As a socially responsible investment fund, taking the initiative to create the future alongside companies.
This is the unique domain of active management—one that can never be reached through a passive approach.

The Joy of Self-Realization and Contributing to a Better Society Through Investment

The essence of investing goes far beyond simply serving as an “alternative to savings” or a means of “asset growth.”
It is an extremely personal and noble expression of one’s own aspirations for the future and the kind of society one wishes to leave for the next generation.
There is joy in the investor’s own growth through the investment process and in feeling a tangible connection to society.
When you realize that the funds you have invested are solving someone’s problems somewhere, creating new technologies, or serving as a force to preserve traditions, investing transforms from a mere numbers game into a grand narrative that enriches your life.

This proactive approach to investing is directly linked to the investor’s own sense of fulfillment.
Rather than passively drifting with the market’s currents, you chart your own course and navigate through rough waters.
The ability to enjoy that process is the key to successful long-term investing.
By taking pride in our roles as consumers and continuing to support good companies, society will undoubtedly improve.
Investors become happy, companies grow, and society prospers. The world of active management, with its firm philosophy, is the only realm capable of embodying this spirit of “benefiting all three parties.”
To make investing more interesting and the world a better place, we must take the initiative and take that first step on our own.

Summary

True impact investing does not arise from cold, hard numerical screening, but from the passionate “bond” formed between investors and companies, and the earnest “desire” to create a better future.
Mechanical index investing cannot touch the soul of a company or engage in the kind of dialogue that transforms society at its core.
On the other hand, active management—which values the lived experiences of ordinary people—can bring tangible change to society through the act of investing, while simultaneously enriching the lives of investors themselves.

Rather than treating asset management as a mere pursuit of efficiency, we should utilize it as a means to project our own will onto society.
It is only by doing so that the sustainable, vibrant society we truly desire awaits us.
Through the journey of investing, we can make the world more interesting and more prosperous. The protagonists of this journey are none other than each and every one of us, as ordinary citizens.