Joint SEC-NIDA seminar evaluates performance
The Securities and Exchange Commission and the School of Development Economics of the National Institute of Development Administration have held a seminar on the performance of Thai equity funds, the SEC said yesterday.
The "Thai Equity Fund Insight" was held at the year’s fifth "SEC Working Papers Forum". Researchers from the SEC and the NIDA School of Development Economics presented their studies on Thai equity-fund performance and recommended the information investors should have in hand before putting their money into such funds.
The forum was hosted under a memorandum of understanding between the SEC and four leading business schools, aiming to apply academic research to the development of the capital market.
Associate Professor Dr Sorasart Sukcharoensin, an NIDA researcher, said the study on "Persistence of Equity Mutual Fund Performance in Thailand" evaluated whether the performance of Thai equity funds was persistent. Good mutual funds should both provide returns and satisfy the goals of investors at acceptable risk levels, with persistent performance at higher yields than the benchmark.
The study showed the performance persistence of Thai equity funds over the periods of time. Accordingly, investors can use historical fund performance as guidelines for their decision-making. Financial crises may, nevertheless, have an impact on mutual-fund performance persistence during such periods.
Additionally, the comparative study on mutual-fund performance among Asean countries demonstrated the highest level of performance persistence in Thai equity funds.
Chanchai Mateepithaktham, an SEC researcher, noted in a "Mutual Fund Fees and Performance" presentation that mutual-fund fees and expenses might substantially affect the value of investors’ portfolios, especially those with long-term investments in mutual funds for their retirement.
Equity funds with higher total expense ratios (TERs) may not necessarily provide higher returns, while those with better performance and lower TERs are available for investors. Thus investors should acquire relevant information, for example on mutual-fund fees and expenses and performance persistency.
Mutual funds with low fees and rule-based investment strategies such as strategic betas have gained popularity in many markets.
