"The fund will challenge the skill of fund managers to take profit from the movement of the yield of the bond market," said CEO Robert Samuel Penaloza.

Its overseas Aberdeen Group parent took over 100 per cent of Deutsche Asset Management in September 2005, aiming to fulfil the missing segment of its investment products. Aberdeen has only two fixed-income funds so far, and both were launched nine years ago.

Fixed-income funds have sold like hotcakes over the past two years since the interest rate in the market started to rise. This boosted growth in the mutual-fund industry to 60 per cent and 30 per cent in the past two years.

Knowing that it has no bank unit to support it as a sales channel and customer data base, Aberdeen will attract customers by differentiating itself through launching the fixed-income fund, in which the returns will not be tied up with the yield provided by the issuers.

"The fund won't be locked up until the bonds we invest in mature. There'll be some trading along the way in order to gain the upside return," said Penaloza.

He added that for local equity funds this year the company would make some changes about the companies it has been investing in. Following its in-house formula, it will diversify its equity portfolio with 30 securities. Penaloza said some securities were over-valued and fund managers were considering taking them out of the portfolio.

Along with the uncertainty in Thailand, the firm will launch five foreign investment funds this year. It already has three on the shelf.

Christopher Wong, investment manager of Aberdeen Asset Management Asia's Asian Equities, said the firm's view of Thailand remained bullish for long-term investment. The company's Asia Pacific feeder fund retained its weighting of Thai stock at 5.9 per cent despite a hit from the coup and the Bank of Thailand's drastic 30-per-cent reserve requirement measure.

"We haven't changed our allocation here," Wong said. "We still see potential and good strong companies with bright prospects of growing for another 20-30 years in Thailand, Singapore, Malaysia and Indonesia," said Wong.

"The situation in Thailand is not as bad as reflected in stock prices," he added. "The intention of this interim government is genuine. All it's done is for the betterment of the country in the long term. It may take a bit more patience. There're still some good fundamental companies to invest in. However, if there was a labour strike, that would be the risk."

Piyarat Setthasiriphaiboon

 The Nation