My recent travels have taken me from Sacramento to London to Seoul and back to Tokyo. Each stop brought different conversations, but the same underlying themes kept emerging: total portfolio thinking, the impact of artificial intelligence, a maturing investment community in North Asia, with all of it coming together in Tokyo.
The road, it turns out, is one of the best ways to take the temperature of our industry.
I was in Sacramento, California, last October for the MSCI Institutional Investor Forum, co-hosted with the California State Teachers Retirement System (CalSTRS) and the California Public Employees’ Retirement System (CalPERS). It brought together asset owners from North America, Europe, Australia, Singapore and Japan, institutions that don’t always share the same stage.
The breadth of that gathering was itself a privilege. Connecting investors across the world and creating the conditions for those conversations to happen is at the heart of what MSCI does, and I am grateful to the Japanese institutional investors who made the journey to join us.
Index, private assets, risk and sustainability were all on the table. But the conversation that drew the most energy was around the total portfolio approach (TPA). And it felt timely: shortly after the forum, CalPERS announced it would move to TPA, a signal that what had been a forward-looking discussion was becoming mainstream practice.
The case for it is not hard to understand. Private assets are playing a larger role in institutional portfolios. Energy transition and security are introducing new risk dimensions that sit across asset classes. Geopolitical uncertainty and macro volatility are making it harder to manage exposures in silos. Taken together, these forces are making a single, unified view of the portfolio not just desirable, but necessary.
AI
In May, I joined MSCI’s coverage leadership offsite in London. These gatherings matter because they surface what our teams are hearing from clients, unfiltered, across geographies.
The dominant theme was AI. Not in the abstract, but in terms of what MSCI is now able to build and deliver. Twelve months ago, there was excitement but also uncertainty about how the technology would genuinely change the industry. Now, there are tangible products, real use cases, and measurable impact on how quickly we can develop and deliver solutions.
In index, AI is delivering customisation at scale, across more use cases, faster than clients previously thought possible. In analytics, development cycles that once took months are compressing. In private assets, where data has long been the stubborn problem, AI is starting to move the needle.
As Henry Fernandez, our chief executive officer, put it, our ambition is to leverage AI in everything we do to drive faster innovation and greater productivity. That conviction was visible across every conversation, and for clients, it changes what is now possible.
I have returned to Seoul several times this year. MSCI first put down roots in the city in 2012, and what has grown since is a client community that is more sophisticated, more globally minded and more ambitious.
On my most recent visit, I had the opportunity to meet senior leadership at some of Asia’s largest asset owners. What I heard confirmed something I see across North Asia. Institutions are asking more searching questions about how they benchmark and measure performance across an increasingly complex portfolio. Corporate governance reform is adding another dimension as asset owners reconsider how they evaluate the companies they hold.
The parallels with Japan are genuine. Both markets are navigating ageing demographics, corporate reform agendas and growing allocations to private assets.
Threads converge
Back home in Tokyo, the threads from every other stop come together. There is a structural shift underway in how institutions invest, and index is playing a major role in it.
With the expansion of the Nippon Individual Savings Account (NISA) scheme, retail investors are entering index-linked products in significant numbers, while hedge funds, brokers, market makers and corporates are all paying closer attention to index flows and their implications.
MSCI has been present in Japan for more than 20 years. Pension funds, insurers and asset managers engage with our work in different ways, while individual investors access global markets through products built on our indexes.
Our indexes also play a growing role in how Japanese corporates are seen and evaluated by global investors. The weight of that is something we carry into every conversation.
That evolution was the reason we convened the MSCI Index Intelligence Forum in early July, the first event of its kind in Japan.
The index ecosystem is not static. Investment needs continue to evolve, and with them, the role that benchmarks play — in measuring performance, representing markets, and providing liquidity signals and guiding investment decision-making. New participants and new technologies keep redefining what is possible.
Our role is to listen to everyone in that ecosystem, to work together, and to keep contributing to the growth of the industry.
Matsuo Basho, a 17th century Japanese poet and author of Oku no Hosomichi, or Narrow Road to the Deep North, spent his life on the road, weaving the new and the transient into something of lasting meaning.
That spirit feels closer to this work than any single destination ever could.
*Ryoya Terasawa is head of North Asia at MSCI Inc.
