A beautiful song needs many melodious notes. A great picture needs a perfect mix of colour tones. Investment has its own needs - a flexible combination of tools to diversify the risk. However, what's more important is the content inside this composition that satisfies the listener, viewer or investor.

There are hundreds of mutual funds offered by 19 asset-management firms. They can be categorised into fixed-income, equity, mixed, property, foreign investment funds (FIFs), long-term equity funds (LTFs) and retirement mutual funds (RMFs).

More and more, each type of fund is showing more variety of structure. For equity funds, the traditional SET50 fund is beaten by each asset firm's in-house selective stock fund. Amid the uncertainty, when investing in securities is like riding a roller-coaster, the trend is shifting to good stock funds. The SET composite index has been marked as providing the fourth-highest dividend yield in the world.

Plain vanilla fixed-income funds have dominated the market for quite a long time as conservative investors and former bank-deposit lovers need to sleep tight at night without having to panic about whether their capital investment will disappear.

The closed-end fixed-income fund and money market remain popular, but we are seeing some companies offering features such as open-ended, medium-term fixed-income funds. Some are planning to actively trade bonds in a bid to achieve yields higher than the coupon rate.

The variety of property fund is limited as this type is new to the Thai market. Most of the FIFs available are feeder funds. Fund managers raise funds domestically and invest in an international fund. Features of the fund may include equity, fixed-income and commodities.

The LTF invests in equities, while features of the RMF include investment in the money market, fixed-income, equity and FIFs.

The launch of Kasikorn Asset Management's Life Style Fund represents a new chapter in the Thai fund industry. It is a mixed fund that invests in equities, fixed-income, property and FIFs, all in one pack. Investors don't need to separately buy four funds to cover their investment risk.

One for all but all is not for one

The Life Style Fund provides four ranges of investment proportion: K-2500, K-2510, K-2520 and K-2530. Literally, 2500, 2510, 2520 and 2530 are BE years, implying that K-2500 is for those who were born before 2500 BE (1957), K-2510 is for those who were born before 1967, K-2520 is for those who were born before 1977 and K-2530 is for those who were born before 1987.

All funds will invest in four investment tools, but the proportion of equity investment is the variable. The year indicated as the name of the fund is just the symbol to separate the risk tolerance. Those who are 50 years of age are welcome to invest in K-2530 if they can handle the high risk. In the meantime, those who are 25 years of age are welcome to buy K-2500 if they are risk freaks.

K-2500 will invest 20 per cent in equity, 25 per cent in FIF and the rest in property and fixed-income. K-2510 will invest 30 per cent in equity, while K-2520 and K-2530 will invest in equity at rates of 45 and 55 per cent, respectively.

No more no money, no honey

Investors with less than Bt10 million of idle money used to have to take care of their own investment portfolios.

However, as the trend of consumer power is getting stronger and stronger, mutual fund companies are adjusting their business strategies.

Some may still enjoy taking special care of their premium customers, but statistics show that only 10 per cent of savings are accounts with more than Bt1 million - and mutual funds account for only 20 per cent of savings. So some asset-management companies are focusing more on retail investors.

Many like Ayudhya Fund Management (AYF), TMB Asset Management (TMBAM), Thanachart Fund Management, MFC Asset Management and One Asset Management have set up websites to serve this small-money group of investors.

Even giant Kasikorn Asset Management, which previously set a minimum investment for most of its funds at Bt10,000 or Bt50,000, has lowered the figure to Bt5,000.

It even surprised the market by offering a regular savings plan with a minimum investment of Bt500. Previously, the lowest minimum investment in the industry was Bt1,000 for MFC's Nichada Thani Property Fund.

AYF, TMBAM and One offer a monthly deduction with a minimum investment of Bt2,000. Investors can choose to invest in one or more funds.

The schemes allow investors to choose the date and amount they want to invest. Such a method is called "dollar cost averaging", a periodical investment in a certain fund or stock.

For new players, it's not a bad idea at all to get to know about mutual funds by simply investing Bt500 a month. If it turns out to be good, the light of your financial independence day will be seen at the end of the tunnel. If it doesn't fit your style, Bt500 won't hurt. I'll bet you pay a lot more for your phone bill.

Piyarat Setthasiriphaiboon

The Nation