Thailand's mutual-fund industry, which grew 25.53 per cent to Bt2.61 trillion in net asset value (NAV) last year, is expected to increase by at least 10 per cent this year due mainly to high liquidity, the Association of Investment Management Companies s
AIMC chief executive officer Sathapana Leoprapai said fixed-income funds had witnessed the sector’s highest NAV of about Bt1.58 trillion, accounting for 60 per cent of total funds last year. The NAV of equity funds amounted to Bt569 billion, or 22 per cent.
Some 704 new fixed-income funds were launched during the year, worth Bt1.34 trillion combined. Of the total, 90 per cent went to those replacing expired funds.
Fifty-seven equity funds, most of which were trigger funds, were launched in the year with an overall value of Bt16.68 billion.
“Growth in fund management came mainly from fixed-income funds. The 2013 factors do not differ much from the previous year, and liquidity remains high. It is possible to see mutual-fund business growing by more than 10 per cent on average,” said the chief executive.
Morning Star Research (Thailand) managing director Peet Yongvanich said 52 trigger funds worth more than Bt22 billion were launched last year.
In general, more than 70 per cent of equity funds yielded a higher return than trigger funds as their return is not limited during an upward trend.
“Long-term funds saw a net inflow of Bt6.3 billion for 2012. About Bt27 billion flowed into LTFs in the fourth quarter, a record since LTF establishment. Some Bt10 billion-Bt19 billion flowed into LTFs in the quarter. Retirement mutual funds’ net inflow amounted to Bt14 billion in the year, and it is expected to continue to rise this year,” Peet said.
Kittikun Tanaratpattanakit, an analyst at Morning Star Research (Thailand), said nine of the top 10 best-performing equity funds in 2012 were large equity funds with stock selection as their investment style.
The financial-institution sector was selected the most by the best-performing funds, at 25.3 per cent, followed by the communications sector at 9.8 per cent.
Top stocks selected by the best performers included CP All, Bangkok Bank, Berli Jucker, Airports of Thailand and Electricity Generating.
“Gold funds saw an unsatisfactory performance in 2012, compared to that in 2011. Foreign equity funds, like global equity funds and emerging-market equity funds, began to perform better after a slowdown in 2011. Funds with consecutive satisfactory performance include small and medium-sized equity funds, and emerging-market fixed-income funds. Therefore, diversification of investment should be made, as each asset yields a different rate of satisfactory return in a different period,” said the analyst.