INDEPENDENT BODY to rank PERFORMANCE

Information concerning mutual fund performances, available on the trade association's website, does not at this time include any risk assessment method and is inadequate, Voravan Tarapoom, AIMC's chairman since March 31, said yesterday.

Missing the big picture, investors often have to seek out other sources, for instance, magazines and the Internet.

For investors' peace of mind and convenience, the association could outsource the task to a third party such as Lipper, a subsidiary of Reuters, he said.

The Hong Kong Investment Funds Association has its members' fund performances tracked and ranked by Morning Star Asia. And weekly performances are available online.

For the UK's Investment Management Association, fund prices and yield information is provided by TrustNet.

In Thailand, such information is compiled solely by AIMC on a daily basis with input from its members.

But figures are not enough to help investors make decisions.

Rankings, as long as the rating agency is registered with the Securities and Exchange Commission, will benefit investors and bring more transparency, said Pravej Ongartsittigul, senior assistant secretary-general of the SEC.

With registered entities, at least investors can be assured that the methods used to gather and assess such fund information are accountable.

With an "independent pair of eyes", asset management companies can compete on providing the best services, Pravej said.

But the reactions from colleagues are mixed and mostly unfavourable, Voravan said. The most common reason for not embracing a third-party fund performance ranking is that their funds are "unique" and require a "different" set of measurements.

Voravan, the managing director of Bualuang Asset Management, reckons that most are just reluctant to share their own information.

"Many fear being ranked at the bottom," she said. "But these rankings change all the time."

Local asset management firms would not believe the data, and companies with global ties "did not want it to happen", she said.

"It is not a case of a lack of cooperation [among asset management firms] though," said Veerachote Jiraborvornpongsa, adviser to BT Asset Management, whose net asset value was a 10th that of Bualuang Asset Management as of April 25.

Veerachote said that from the AIMC meetings he has sat in, most companies seem to support the notion of an independent ranking system.

He believes it is a matter of business, for example costs and conditions, that is hindering the process.

For one, asset management companies are not allowed to feature any Lipper awards they have won in their advertisements, said Voravan, who thinks it is ironic.

But since the SEC launched its guidelines for fund advertisement on March 1, it has loosened its regulatory grip on what information and claims asset management companies can make.

According to the new guidelines, advertisements that do not mention any return forecast do not have to be approved by the SEC, Pravej said.

"[In case of mishaps] we still

prefer punishment through the market rather than regulations," he added.