Guru Speak

Time is running out for those who have not yet invested in retirement mutual funds (RMFs) or longterm equity funds (LTFs). There are only threeandahalf months left in the year.

This year, the Revenue Department has increased the tax deductible for money invested in LTFs and RMFs from Bt300,000 to Bt500,000. This means we can simply increase our tax savings by 25 per cent, or Bt50,000.

There are many types of RMFs that you can choose to match your risk appetite, including bond funds, equity funds, balanced funds, flexible funds and moneymarket funds - 67 funds in all. Without taking into account dividend payments and tax savings, returns from each asset class have been from 9.96 per cent to 81.01 per cent for the past five years. One of the recommended ways to invest in an equity fund and earn such returns would be through dollarcost averaging.

LTFs must invest at least 65 per cent of their net present value in securities as regulated by the Stock Exchange Commission. There are ranges of LTF that vary by percentage of investment in securities and by dividend payments. While returns from LTFs may not appear to be very attractive, with tax savings you can earn at least 1025percent more over the three years of investment.

The accompanying table indicates the percentage growth of each fund, broken down into one, three and five years.

Choose funds that fit your risk appetite and make sure you do not miss the boat.