Tisco jumps on the FIF bandwagon
Like many other asset-management companies, Tisco Asset Management will launch its second foreign investment fund (FIF) that invests in Asian markets. But unlike the others, Tisco will introduce the first-ever options-linked FIF that offers a capital guarantee.
The Tisco Asian Pacific 95 per cent Capital Protection Fund, jointly developed with France's Barep Asset Management, will be 100 per cent invested in the company's Barep Nana 2.1 fund. That fund invests 95 per cent of its holdings in either two-year bonds rated AA negative or AA that are issued by Barep's parent, Societe Generale, the fourth largest bank-owned asset-management company in Europe. The remaining 5 per cent will be split equally in options between SGAM's Japan Index Fund and Aberdeen Global Pacific Fund. These two funds cover the entire Asian market. More importantly, said Eakachai Chongvisal, Tisco's vice president and head of its mutual fund business, the funds have outperformed the market over the last three years. With this options method, each month both gains and losses will be capped at a maximum of 5 per cent. Under the best-case scenario the fund can provide a 120-per-cent return, and in the worst-case, a 120-per-cent loss, according to Eakachai. Based on the performance of SGAM's Japan Index Fund and Aberdeen Global Pacific Fund over the last three years, the average-case scenario will be a 33.7-per-cent return. At the end of the day, investors will receive at least the 100 per cent initial investment guarantee in US dollars but the percentage drops to 95 per cent when taking into account the currency exchange rate into Thai baht. "With this method, investors can rest assured their investment would will not fall more than 5 per cent per month. But on the other hand that is offset by the fact that your gain will not exceed 5 per cent per month," said Eakachai. Once the Securities and Exchange Commission approves the fund, which is expected soon, it will be offered to the public this month. The minimum investment is Bt50,000. Since the Thailand Futures Exchange commenced operations in April, two local asset-management firms - namely Siam Commercial Asset Management and United Overseas (Thai) Asset Management - have launched similar capital-guaranteed funds linked to the performance of TFEX's SET50.
Piyarat Setthasiriphaiboon The Nation
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