The company's private fund portfolio is the country's second biggest after Kasikorn Asset Management. Its provident portfolio is second only to Krung Thai Asset Management's.

Due to the small chain of its parent, Tisco bank, the mutual-fund firm has focused on expanding its private- and provident-fund customer base.

It will also expand its mutual-fund business by tapping the customer base of its provident funds.

"We cannot produce a mass product. If customers want the regular fixed-income fund, it's available in many places. We have a small channel, so we have to offer exclusive products for sophisticated investors," said Teeranat Rujimethapass, head of private and mutual funds.

While other asset-management firms are expanding their asset sizes through fixed-income funds, which mostly invest in government bonds or highly secured debentures, Tisco has gone out on a limb to catch a specific investor group that prefers pure corporate bonds.

"The return yields around 20-30 basis points higher than regular fixed-income funds. However, investors must understand that the risk is higher as well," Teeranat explained.

"We have a small group of customers, so we can launch such a fund. Currently there are few short-term corporate bonds. We know the demand, and we look for the supply. We'll talk to some companies who might want a short-term fund but don't want to borrow from banks. We'll screen them to make sure that investors receive their returns."

By this method Tisco Asset can get out of the fee-cutting war. It can charge a fee that covers its expenses and also generate higher rates than government-bond funds.

"As the supply is low, we can't launch a big fund. It could be just Bt1 billion to Bt2 billion at a time," said Teeranat.

While most asset-management firms posted huge growth last year, Tisco was among the few where assets under management dropped.

One reason was that the government pension fund pulled out Bt2 billion to manage itself.

Teeranat said the company was not considering launching a property fund but would launch five other funds this year.

It hopes that its private fund will grow from Bt25.03 billion to over Bt30 billion by the end of the year, and it expects the assets under management of its mutual fund to exceed Bt10 billion.

Piyarat Setthasiriphaiboon

The Nation