Mutual fund value hits record in H1 but growth below par
THE VALUE of Thailand's mutual-fund industry, excluding term funds (short-term bonds with no more than one-year maturity), hit a new record at Bt4.038 trillion in the first half of 2015, Morningstar Research says. Nevertheless, the figure still represents
In the first half of last year, the industry surged by 17 per cent, ending the year with an expansion of 23 per cent. The value of the industry was around Bt3.8 trillion at the end of 2014. “Last year was a good year for Thai shares and the mutual-fund industry when compared with this year as the only severe turbulence was the political situation in the first half, and investors have given time for this government to work,” said Kittikun Tanaratpattanakit, Mornin-gstar Thailand’s senior data analyst.
“The mood of investors in Thai stocks and funds in 2014 was not as bad as in the first half of this year, which was beaten to a pulp by a slowdown in the global and domestic economies that seems to be worse than last year, the prolongation and escalation of Greece’s debt situation, and the latest plunge of the Chinese capital market,” he said.
Kittikun believes that the full-year growth of the mutual-fund industry will be at “the beginning of a double-digit range”. The main growth driver in the second half will continue to be investment in foreign equity funds, which expanded in the first half by 36.92 per cent when compared with the same period last year.
Foreign investment funds (FIFs) show strong growth, excluding term funds and high-yield bonds, with a net inflow of a new high at Bt302.11 billion in the first half of 2015 with 28 new funds launched, bringing the current total to 285 funds and more than Bt70 billion in net inflows.
Meanwhile Thai equity funds had a net outflow of Bt72 million in the same period, a reversal of the previous 13 quarters, with total net assets of Bt178.635 billion.
“Total net assets of FIFs have expanded from Bt1.533 billion in 2002 to Bt302.11 this year. The growth was fastest in the past two to three years, since the return on investment in foreign equity funds is more attractive than other funds at the moment,” Kittikun said.
FIF equity has almost a 60-per-cent market share, the most since the financial crisis in 2008 while Japanese equity funds have continued their strong performanc to top the chart with returns of 16.5 per cent in the first six months, but that figure had dropped to 13.7 per cent as of July 8e on top of the chart with returns of 13.7 per cent as of July 8.
