Local fund companies plan to launch property funds with a combined value of between Bt3 billion to Bt6 billion, expecting the funds to generate interest among investors due to higher returns from the equity market.
MFC Asset Management plans to launch two property funds this year, its president Dr Pichit Akrathit said.
The company is continuing to focus on freehold asset property funds - storage fund and office fund.
It expects a fund size of Bt1.5 billion to Bt2 billion and a return of 78 per cent a year, said Dr Pichit.
MFC expects the storage fund will be traded in the third quarter this year, while, the office fund schedule has not been finalised.
"The returns of property funds are 7.79 per cent, higher than stock dividends, which average 3.4-3.5 per cent. Investors who want a stable rate of return should allocate money in property funds," he said.
Supakorn Soontornkit, MFC senior executive vice president, added that Real Estate Investment Trusts (REIT) are an alternative investment as well as property fund. The company is offering IREIT, which had returns of 5.44 per cent for the period January to June.
However, MFC might postpone a hotel fund because of the poor outlook for the tourism industry due to the recent political riots. The domestic tourism industry is estimated to need six months for recovery.
DR Pichit said rumours were rife recently that the redshirt protesters plan a new rally by the end of this year. Therefore, MFC has to monitor the political situation before deciding whether to launch a hotel fund.
Suvabha Charoenying, managing director of Thanachart Securities, said the securities house has a plan to launch a property fund with a total value of between Bt1.5 billion to Bt2 billion. It expects returns of 7-8 per cent per year.
Besides the property fund, a shortfixed income fund might attract investors who prefer low risk but high return.
Due to excessive liquidity, SCB Asset Management (SCBAM) is also introducing three shortterm fixedincome funds worth combined of Bt9 billion. The funds offer returns of 1 per cent to 1.25 per cent per year.
SCBAM president Jotika Savanananda said that the three funds will be for three months, six months and oneyear duration. It will be invested in government debentures.
Jotika said the fund is suitable for investors who prefer high stability but low risk. The shortterm fixedincome fund offers a higher rate of return than bank interest rates. The company believes the fund will be received warm welcome from investors.