CITI Thailand, undaunted by the global economic slowdown and escalating trade war between the superpowers, is pressing ahead with the launch of a technology fund that it believes will beat other investment sectors.
Don Charnsupharindr, director and retail banking head for Citi Thailand, said the company has partnered with Krungsri Asset Management to launch Krungsri World Tech Equity Hedged FX-A, which is invested in a high-performance offshore fund managed by BlackRock. The global investment firm focuses on investment in rising technology-driven companies. The fund will be sold exclusively|to Citigold clients of Citi Thailand via an initial public offering from |May 21-29.
Don said that the fund could help expand investment opportunities for retail investors while providing portfolio diversification.
Information from Citi analysts suggests there is an unstoppable trend of digital disruption, driven mainly by artificial intelligence (AI), robotics and automation, and blockchain. These forces have been powerful drivers of innovation and growth as their application spreads into all aspects of work and leisure. In particular, they are being employed in a wide range of applications across different industries.
While markets have suffered falls recently, Citi analysts hold positive views on cyclical stocks, including those in the technology sector, and that such stocks will continue to outperform the defensives. However, this depends on economic growth. In the belief that the world economy recovers, Citi analysts expect that the technology sector could gain earnings of 9-10 per cent by the MSCI method of calculation, said Don.
Thanapol Itthinithipak, vice president of Southeast Asian retail and institutional business at BlackRock, said that over the past 10 years, the technology market has outperformed global benchmark and remains above the volatility index.
Thanapol said the technology market could grow by up to US$4.3 trillion and expand 23 per cent by 2022, owing to a global trend that has pushed technology and innovation into other businesses. Thanapol also cited consumer behaviour that is stimulating demand for more technology. Drivers of disruptive technologies that are in the spotlight include artificial intelligence, cloud computing, electric and autonomous vehicles, and the Internet of Things.
“The recent global market correction and high market volatility offer opportunities for investors to invest,” Thanapol said. In the past investors had worried about the higher prices of technology stocks, he added.
Anekporn Bodhidatta, chief distributor relationship officer at Krungsri Asset Management, said that Krungsri World Tech Equity Hedged FX: KFHTECH-A was a mutual fund that invests in a master fund named BGF World Technology Fund (Class D2, denominated in US dollars). It has been awarded a five-star rating by Morningstar rating and is managed by fund managers that have received top Citywire ratings. Its exchange rate risk is 90 per cent hedged.
Regarding the trade war, Don was optimistic that the US and China would eventually settle their disputes. “Yet, it is hard to make predictions about the direction of the trade war,” he said.
Anekporn advises that investors should adopt a strategy of dollar cost averaging for investing during market volatility.
Thanapol said investors should look at the longer term.