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Published on April 10, 2008

The plan is to model the asset allocation, investment strategies and stock picks of these funds after those of the company's long-term equity funds, which are among the industry's top three in their category in terms of returns, said executive vice president Kampol Adsavakulchai.

There are customers who have maximised their tax allowances from long-term equity funds but cannot find funds with similar asset classes for further investment, he said. Demand has been overwhelming for the SCB MAI Stock Long-Term Equity Fund (LT3), and Kampol said it made sense to set up a separate equity fund.

LT3, which invested about 40 per cent in small- to medium-cap stocks - SET 51 to SET 100 stocks, said Kampol - reported a return of more than 40 per cent last year, compared with the Stock Exchange of Thailand (SET) Index's 26.22 per cent.

Following in the footsteps of LT3, the revived SCBPMO will allocate 30 per cent of its assets to the Market for Alternative Investment (MAI) and small- to medium-cap SET stocks.

Kampol is banking on financial stocks, which he believes still have plenty of upside. SCBPMO will also overweigh on commercial and real estate sector stocks.

He believes the SET is on the path to recovery and will book 10-15-per-cent growth this year. There is little correlation between the SET Index and gross domestic product (GDP), he said, pointing out that last year's GDP growth was a mere 4.5 per cent, compared with the SET Index's 26 per cent.

Although the SCBPMO is now Bt8.33 per unit, Kampol said that after the adjustment the value would be up to at least par, at Bt10 a unit.

"The fund was launched when the SET was around 1300-1700 points," he said.

Kampol said along with the SCB Combo plans rolled out by parent company Siam Commercial Bank earlier this year, SCBAM's re-engineering of its existing equity funds would nudge retail investors towards diversification - an investment lesson in disguise.

The three other LTFs to be emulated in the re-engineering are the SCB Smart Long-Term Equity Fund, SCB Inter Long-Term Equity Fund and SCB Target Long-Term Equity Fund.

Ki Nan Tsui

The Nation