SMITH BANOMYONG, the new president of SCB Asset Management (SCBAM), says the top plan to drive up assets under management (AUM) is to focus more on retail customers, which is the firm's weak area, while the returns of each fund must beat the benchmarks a
Smith said he was familiar with retail customers because in his previous job, as executive vice president of the wealth division at Siam Commercial Bank, he was involved with deposit and investment products that catered to individuals.
He succeeds Jotika Savanananda, who stepped down from the post. Smith said SCBAM was the market leader in private funds with AUM of Bt102.58 billion, but in terms of funds held by retail customers, its ranking is mid-tier.
“We have to encourage more retail customers to select our funds by offering them the right ones. Individual customers are more interested in returns than risks, unlike institutional investors, for which risk is the first consideration,” he said.
SCBAM this year targets AUM of Bt1 trillion. As of April 25, the figure was Bt936.237 billion, comprising private funds worth Bt102.58 billion and mutual funds worth Bt733.14 billion. Most retail customers invested in mutual funds. SCBAM has about 500,000 retail customers, around 300,000 of whom are active clients.
The company will have to providing fund information to customers more quickly so they can make timely decisions, the key to enjoying high returns from the market.
To beat the market benchmarks and its competitors’ funds, SCBAM must look ahead to see which markets are on the cusp of opportunity. In this way, its customers can invest at a fair price and then profit when the markets mature, he said.
The company recommends that its retail customers invest in foreign funds, focusing on equities in Europe, Japan, China and South Korea while the Thai market unstable because of the political unrest. For customers who continue to prefer investing in the domestic market, fixed-income funds are the choice, he added.
Smith said real estate investment trusts (REITs) and infrastructure funds would be promoted to retail customers as well.
Even though the political deadlock has had an impact on investment and the stock market, in Smith’s views, funds are the right investment because they offer returns higher than bank deposits. Banks have become less competitive in offering high interest rates for deposits as demand for loans has slowed.
He said the economy was expected to remain sluggish until next year because even if the country gets a new government, its priority will be political reform. After that has been achieved, the government can get down to work on rebooting the economy. In the meantime, retail investors should move into foreign equity funds.