Visit Tantisunthorn said the GPF benefited from lower interest rates and a recovery in the stock market this year, as well as rising returns from its overseas portfolio.

The GPF reported at its annual meeting yesterday that its return on investments last year was 3.71 per cent, and the average rate of returns over the past five years was 6.41 per cent.

Visit said the GPF's foreign portfolio was expected to reach the limit of 15 per cent of its total assets of Bt350 billion in the next few months. He planned to ask the Finance Ministry for permission to invest more in foreign equity, possibly up to 20 or 25 per cent.

The fund has currently invested about 10 per cent of its total assets in overseas capital markets, of which close to 5 per cent is in foreign bonds. The return from its investment in foreign stock markets was about 15 per cent, Visit said.

A large part of the GPF's overseas investment was done via foreign fund managers, but it has also invested directly in energy companies in emerging markets such as China and Malaysia, he said.

The GPF's overseas investment was based on the MSCI benchmark, and 50 per cent was in the United States, he said.

Visit said increasing investments overseas was intended to diversify risk. The local equity market makes up about 12 per cent of the GPF's investments, but this could be reduced to 10 per cent.

Visit did not think the GPF would invest more in foreign bonds. Bond yields did not vary much between countries, except that the curve of bond yields in Thailand might have a little time lag from the US market, he said.

Asked about investment strategy for the second half of the year, Visit said the GPF would adjust its bond holding in anticipation of a rise in interest rates next year.

Wichit Chaitrong

The Nation