Tuesday, September 29, 2020

TSF -- a track record of outperforming the stock market

Jun 08. 2020
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By The Nation

Mutual Funds are back on investors’ radar as the Stock Exchange of Thailand Index has rebounded. The SET Index reached 1,435.70 at close on Friday, after it had sunk below 1,100 in the middle of March due to the Covid-19 fallout.

Foreign investors have started to come back into the market while local institutional investors remain the driving force for the rebound. Local individual investors are also looking for mutual funds they can put their money in and expect high returns.

One open-ended fund is TISCO Strategic Fund (TSF), which has outperformed the market in the past one month, with a strong track record over the long-term.

Over the past 10 years, TSF -- managed by TISCO Asset Management Co -- yielded investment returns of 11.59 per cent on average annually. Over the past six years, it has outperformed the market for four years, one year it trailed the market and in one year it was close to market performance.

Its volatility is 15.51 per cent on average.

Over a one-year period, the TSF investment return is 7.89 per cent versus minus 12.2 per cent for the market.

Average return of TSF over the past five years is 6.83 per cent compared with market return of 0.57 per cent.

TSF's strategy is to invest in 10 to 15 firms having strong fundamentals and growth potential. Net asset of the fund is not large, worth Bt1.4 billion. The fund also focuses on mid-small cap firms who have average market capitalisation lower than Bt50 billion.

The TSF management applies a bottom-up approach for picking shares, by looking at the financial statement, the business model, the management and at the bigger picture of the industry and economic conditions.

As of April 1, 2020, TSF had invested in three major industries, namely finance and securities, petrochemical, and energy and utility.

The top five listed companies’ shares held by STF at that time were GULF 9.20 per cent, MTC 9.14 per cent, IVL 8.95 per cent, INTUCH 8.58 per cent and BDMS 7.83 per cent.

The management of TSF collects an annual fee of 1.81 per cent and selling fee at 1 per cent from investors.

Its beta is between 1.15 to 1.18, reflecting higher volatility than the market. Currently, its net asset value (NAV) per unit is Bt53.19 as of June 4. The fund does not pay dividends; annual returns are accumulated and added to the NAV and its average returns is 10.8 per cent since its establishment 16 years ago.

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