Thai mutual fund sector swells
Sunday, 23 August 2009
BANGKOK, Aug 22: The size of the mutual fund industry in Thailand could grow to 20 per cent of gross domestic product (GDP) by the year-end, as public understanding of funds and personal investment has continued to grow, according to Internet.
Patareeya Benjapolchai, the president of the Stock Exchange of Thailand, offers a gift to Charnchai Charuvastr, the chairman of Siam Paragon Development, at the opening of the Mutual Fund Fair Siam Paragon. The investment fair will run until Sunday.
Voravan Tarapoom, the president of the Association of Investment Management Companies, said total assets under management stood at 1.756 trillion baht, or 16.90 per cent of GDP, in July.
"The industry has continued to grow steadily over the past several years. In 1993, when the industry started, assets under management were 205.99 billion baht, or 6.70 per cent of GDP. As of the end of last year, assets were 1.533 trillion baht, or 19 per cent of GDP," she said at the opening of a fund exhibition.
Mutual fund assets as a percentage of bank deposits has also increased, to 21.80 per cent at the end of 2008 compared with a low of 2.40 per cent in 1997 at the height of the Asian economic crisis.
Low interest rates, market deregulation and greater public understanding of fund investment has helped increase the fund industry, as have tax incentives for contributions to long-term equity and retirement mutual funds.
Voravan, also the managing director of BBL Asset Management, said 65.20 per cent of total fund assets were held in fixed-income funds, with equity funds accounting for another 17.30 per cent.
Foreign investment funds have become a popular asset class, as investors diversify risk by investing in overseas stocks, bonds and commodities.
The fund industry continues to have strong growth potential, Ms Voravan said. The AIMC expects net assets as a percent of GDP to reach 20 per cent by the end of the year, with assets equal to 24 per cent to 26 per cent of bank deposits.
Voravan cautioned investors in local stocks to be wary of short-term corrections, as the main index has already risen by 40 per cent since the beginning of the year. The SET index yesterday closed at 640.98 points, up 9.7, in trade worth 19.77 billion baht.
"Since the potential to benefit from further upside gains is quite narrow, cost averaging is one good way to help reduce the risk from market volatility," she said.
Cost averaging involves investing a set sum at regular intervals, regardless of the market price. Over time, the strategy helps average out the overall cost of investments, smoothing the impact of short-term gains and losses.
Voravan said investors concerned about risk should consider property funds as a long-term investment option. Yields can reach 8 per cent per year, with values backed by collateral assets.
Patareeya Benjapolchai, the president of the Stock Exchange of Thailand, offers a gift to Charnchai Charuvastr, the chairman of Siam Paragon Development, at the opening of the Mutual Fund Fair Siam Paragon. The investment fair will run until Sunday.
Voravan Tarapoom, the president of the Association of Investment Management Companies, said total assets under management stood at 1.756 trillion baht, or 16.90 per cent of GDP, in July.
"The industry has continued to grow steadily over the past several years. In 1993, when the industry started, assets under management were 205.99 billion baht, or 6.70 per cent of GDP. As of the end of last year, assets were 1.533 trillion baht, or 19 per cent of GDP," she said at the opening of a fund exhibition.
Mutual fund assets as a percentage of bank deposits has also increased, to 21.80 per cent at the end of 2008 compared with a low of 2.40 per cent in 1997 at the height of the Asian economic crisis.
Low interest rates, market deregulation and greater public understanding of fund investment has helped increase the fund industry, as have tax incentives for contributions to long-term equity and retirement mutual funds.
Voravan, also the managing director of BBL Asset Management, said 65.20 per cent of total fund assets were held in fixed-income funds, with equity funds accounting for another 17.30 per cent.
Foreign investment funds have become a popular asset class, as investors diversify risk by investing in overseas stocks, bonds and commodities.
The fund industry continues to have strong growth potential, Ms Voravan said. The AIMC expects net assets as a percent of GDP to reach 20 per cent by the end of the year, with assets equal to 24 per cent to 26 per cent of bank deposits.
Voravan cautioned investors in local stocks to be wary of short-term corrections, as the main index has already risen by 40 per cent since the beginning of the year. The SET index yesterday closed at 640.98 points, up 9.7, in trade worth 19.77 billion baht.
"Since the potential to benefit from further upside gains is quite narrow, cost averaging is one good way to help reduce the risk from market volatility," she said.
Cost averaging involves investing a set sum at regular intervals, regardless of the market price. Over time, the strategy helps average out the overall cost of investments, smoothing the impact of short-term gains and losses.
Voravan said investors concerned about risk should consider property funds as a long-term investment option. Yields can reach 8 per cent per year, with values backed by collateral assets.