KTAM launching ETF that tracks main HK index

KTAM chief executive officer Somchai Boonnamsiri announced yesterday that the subscription period for the open-ended fund’s initial public offering began yesterday and would run until June 8. Minimum required investment is Bt4 million and the fund’s policy is to invest in the trust units of Hong Kong tracker funds in Hong Kong dollar terms.

The fund offers investors an opportunity to obtain a return that links to the moment of the master fund, reflecting Hong Kong’s Hang Seng Index after expenses. The price per unit is about Bt4 and can be obtained immediately without having to wait until the end of the day like other traditional mutual funds. Moreover, the fund’s policy allows for dividend payments of up to four times per year.

KGI Securities (Thailand) was appointed as the fund’s market maker, Somchai said. "The ETF market in Hong Kong is much broader among investors than that in Thailand," he said.

Pakorn Peetathawatchai, SET chief marketing officer, said the bourse had tried to encourage Thais to diversify their investment portfolios, and ETFs were a good alternative amid the debt crisis of the European Union. In the meantime, the mainland China and Hong Kong markets have good potential.

According to KTAM data, the Hang Seng Index consists of the largest and most liquid 48 companies. It consists of 44 per cent of Hong Kong companies and 56 per cent of mainland Chinese companies.

Furthermore, Hong Kong is a special administrative region of the People’s Republic of China, so it has directly benefited from the mainland’s economic growth in both trade and investment. And as a free port with a low and simple tax system and good infrastructure, the city is an important financial centre in Asia, and its stock exchange is the seventh-largest in the word and third-largest in Asia.