AYF to launch closedend fund with 4 asset classes

The fund size will be more than Bt1 billion and the annual return is expected to be higher than 20 per cent.

Chatrapee Tantixalerm, AYF's chief executive officer, said the closedend fund would invest in four asset groups: soft commodities such as rice, rubber and cassava; metals such as steel and zinc; energy; and precious commodities such as gold and diamonds.

"Thai investors are not familiar with openend funds, which do not guarantee exact returns. They pre¬fer closedend products that carry a guaranteed rate of return. Therefore, this is the kind of fund we plan to launch," Chatrapee said.

He added that if inflation remained high, bonds were not the best solution for beating it. It is best to invest in equities or asset classes linked to commodities, equities and property.

"We need to have flexible invest¬ments, because every kind of asset class has a right time and a wrong time for investment. For example, right now investment in gold offers a high return, but when the return drops, we move to other kinds of asset class - such as steel," Chatrapee said.

Therefore, AYF will launch a fund that invests in four asset classes and expects to provide an annual rate of return of more than 20 per cent to investors. The fund will have a threeyear maturity period.

At the end of last year, assets under AYF management totalled Bt57 billion. This has fallen by Bt3 billion because last year the value of euro commercial paper in which it had invested reached its paymentdue date for more than Bt10 billion. After redemption, only half of that amount was invested in the compa¬ny's other funds.

Although new customers are investing in AYF's funds, it still does not offset the redemption amount.

"After the closedend fund reached its payment due date last year, customers did not invest in AYF's other products because they had more investment choices. Besides, most of them were cus¬tomers of other banks, so it's possible that they convinced them to save with them instead," Chatrapee said.