The remaining four will be launched this year, and Tisco is considering linking the funds with the composite indexes in stock markets in India, Russia and Brazil.

Normally, a structure-note-linked fund is divided into two parts. The first part, usually about 90 per cent, is invested in highly secured bonds. The rest is invested in index options, which is an alternative for an upside gain from the stock market.

When the fund matures, returns generated from the bond yield will cover the loss if the options fail to go the way investors expect. If the options do go the way investors expect, they will gain a double windfall: from both the return on the bonds and the gain from the options.

Theeranat Rujimethapass, deputy managing director and head of both private and mutual funds, said Tisco predicted the baht would appreciate throughout the year, following the strengthening of other Asian currencies, especially now that China and Japan have sent strong signals that they will increase interest rates.

"The way to slow the appreciation is the general election. When the elected government starts to invest, the country's current account will be in deficit," Theeranat explained.

He said that last year, the company's only FIF - the Global Equity Fund - actually obtained a more than 20-per-cent return, but due to the 17-per-cent baht appreciation against the US dollar, the fund managed to return only about 4 per cent net. The company did not hedge the currency, because its original purpose was to provide an upside gain from the currency exchange.

Piyarat Setthasiriphaiboon

The Nation