ENGY etf draws favourable response

The fund unit price closed at Bt4.16 yesterday.

The ENGY etf unit trust started the day at Bt3.96 and slipped to its low of the day at Bt3.95 before head¬ing north to its peak of Bt4.17 and closing at Bt4.16.

The TDEX SET 50 etf was the first etf, which invests 65 per cent of its Bt5billion fund in stocks with high liquidity listed on the SET 50 Index. The remainder of its capital is diversified into government and corporate bonds, derivatives and savings.

The ENGY etf - set up and man¬aged by TMB Asset Management - would invest in energy stocks with large marketcapitalisation and high liquidity. The passive fund will closely mirror the performance of the Stock Exchange of Thailand's largest sector. Its net asset value per unit would be reported every 15 seconds.

ENGY etf 's total fund value is Bt3 billion represent¬ing 730 million units.

These openended mutual funds are tradable any time during trad¬ing hours and replicate stockmar¬ket indices. In major bourses such as the New York Stock Exchange, etfs have been gaining much popu¬larity, particularly those from emerging markets.

Jotika Savanananda, managing director of TMB Asset Management Co Ltd, said retail investors have gradually invested about Bt1 billion in the ENGY etf via TMB Bank's branches, while the remaining Bt2 billion is currently held by the Stock Exchange of Thailand and Phatra Securities, the participating dealer.

She added that the company aims to expand investor base to institutional investors, including insurers, Government Pension Fund, and Social Security Fund.

She added that TMB Asset Management and Phatra Securities aim to boost liquidity of the fund, which is a key factor to attract investors to participate in trading the etf.

The advantage of ENGY etf is when investors buy the fund, they buy the entire group of energy stocks which have large market cap¬italisation. The fund yesterday invested 40 per cent in PTT, 20 per cent in PTT Exploration and Production, and the rest in other energy stocks.

Suvit Mapaisarnsin, CEO of Phatra Securities, said shortterm profit taking brought the fund price down during the morning trading session before bouncing back in the after¬noon.

Like any fund, MTrack Energy has a custodian and is regulated by the Securities and Exchange Commission. But unlike a mutual fund, after the IPO, investors have to trade etf units through brokers, or if in larger lots, participating dealers Phatra Securities, Nomura and Tisco Securities.

These marketmakers will pro¬vide liquidity by acting as the mid¬dleman in creating and redeeming investment units.