TMB Bank expects more Thais |to chase higher returns in funds

She said next year would be a good time to invest in funds as the global economy starts to recover, while interest rates and inflation are low.

Despite the end of the United States’ quantitative easing (QE) programme, capital inflows will continue thanks to the QE in Japan and the European Union. Moreover, global fund managers are actively offering various funds, and the outlook for next year is that penetration in such products will grow, she said.

Investment through funds by Thai individuals is low, just 28 per cent of total deposits, and in numerical terms, funds make up only 4 per cent of deposit accounts. This low penetration rate will encourage fund managers and financial institutions to offer healthy returns to lure Thai investors, Kamolwan said.

She said 2014 had been a volatile year for investment, but low interest rates had persuaded investors to look for alternative products that generate higher returns.

Returns from the Stock Exchange of Thailand improved a lot this year, so far generating more than 20 per cent, while Japanese stocks generated almost 10 per cent returns during the past month, she said. However, investing in stock markets carries risks, so TMB has advised its clients to allocate their money carefully according to their risk appetite.

She said funds were one of the investment choices that the bank will suggest to its clients because of the low risk and the high returns compared with stocks and deposits.

The bank currently manages funds worth Bt160 billion, of which 76 per cent are under its own TMB Asset Management (TMBAM) and the rest with other companies that comply with the open architecture policy. These include UOB Asset Management, CIMB-Principal Asset Management and Aberdeen Asset Management.

Open architecture helps the bank select quality funds in response to customers’ requirements. It also suggests that its customers diversify their investments among asset classes.

Kamolwan said TMB Bank was advising its clients to invest in the Global Real Return Fund, managed by TMBAM, which delivers a healthy return because it invests in multiple asset classes and is able to diversify its portfolio according to movements in the actual global economy.

The Global Real Return Fund invests in asset classes such as equity instruments, the bond market, the financial market, currencies, commodity derivatives, real estate investment trusts, and derivatives with dynamic allocation in line with the economic situation and resistance to market downturns. The fund is suitable for investors with expertise or wealthy people interested in a long-term investment that offers returns in excess of inflation.

The Global Real Return Fund focuses on generating long-term returns that exceed the average inflation of Group of Seven countries. The fund may enter foreign-exchange swaps and/or forward or futures to hedge currency risk exposure, depending on the fund managers’ discretion. Dividend pay-outs are usually made on a regular basis of four times per year.

Minimum initial investment is Bt510,000, and Bt10,000 for the subsequent investments.

For every Bt500,000 invested in the Global Real Return Fund, the customer will received a free unit trust of the TMB Money Fund worth Bt1,000.