Guru Speak

One of the easiest and most efficient ways for you to put your money to work is through a mutual fund. These make it easy for you to invest in a wide range of assets - not just shares - at lower cost and lower risk, and with greater convenience than would typically be the case if you had to make the investments yourself directly.

Your money is pooled with that of other investors and invested in assets such as equities, bonds and property in accordance with the prospectus for each fund as approved by the Securities and Exchange Commission. The money you invest entitles you to a proportionate share of the fund's total value (measured as net asset value or NAV), which you can redeem according to the rules of the fund. The value of your investment moves in line with the NAV of the fund.

Thai investors in mutual funds have plenty of choices. As of October 31, Thailand had 21 mutual fund companies offering around 1100 mutual funds, with Bt 1508 billion under management (measured by NAV). My own company, BBL Asset Management Co Ltd (75 per cent owned by Bangkok Bank) offers more than 80 different funds.

Classified by asset class, the industry's most popular funds are fixed income (649 or 64 per cent of total NAV) and equity (242 or per cent). There are also around 90 funds that contain a mixture of asset classes, and about the same number of dedicated property funds.

Mutual funds offer several key advantages for investors.

For one, you can avail of the expertise of professional fund managers with access to research and analysis by investment experts, rather than trying to pick winning investments yourself.

And tapping into this all this expertise is not expensive - the typical expense ratio for investing in Thai mutual funds is among the lowest in the world, at around 0.4 per cent to 2 per cent of NAV per annum.

In addition, returns on mutual funds are taxfree as the Government recognises their important role in helping boost the nation's savings rate and people's retirement incomes, and therefore actively encourages people to invest in them.

Increasingly popular are funds structured as Retirement Mutual Funds (RMF) and LongTerm Equity Funds (LTF), both of which offer additional tax incentives.

Being able to diversify your portfolio and spread your risk is another big advantage.

Most mutual funds allow daily redemptions so that investors who need to access their funds can do so when it suits them. The wide range of funds available means you'll be able to find one well suited to your needs, in terms of the returns you are looking for, the level of risk you are prepared to take, and the time frame you have on your investment.

So there are many good reasons to consider mutual funds, investing as much money as you can on a regular basis. We all need to provide for our financial future and now is a great time to start.