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Investment in FIFs should pay off this year: analyst


Foreign Investment Funds (FIFs) are likely to grow this year if there is no significant change in Thai stocks, senior analyst from Morningstar Research Chayanee Juengmanon said on Tuesday.

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She said money that flowed into FIFs over the past three weeks were investments in Chinese and tech shares.

“At the end of 2020, the net value of FIFs was Bt840 billion, up 27.5 per cent year on year. Based on this, FIFs account for 21 per cent of the Thai mutual funds market, up from about 10 per cent in 2016,” she said.

Meanwhile, she said, Chinese equity funds had the highest asset value of Bt120 billion, up 185 per cent year on year from its high returns of nearly 19 per cent.

However, she said investors should be careful when investing in FIFs as their returns will not be the same as the previous year.

"At the end of last year, returns on mutual funds led by tech shares stood at 48.97 per cent, global shares at 23.73 per cent, Asian shares 18.98 per cent, healthcare shares 22.63 per cent, Chinese shares 18.89 per cent and emerging market shares at 9.36 per cent," she said.

She said the returns in Thai equity funds this year would rise in line with the recovery in the Thai stock market once the government is able to control the new round of Covid-19 infections.

"The returns of large Thai equity funds at the end of last year dropped by 10.41 per cent, but its 10-year average return was 4.77 per cent, higher than China, Japan and emerging markets," she said.

"However, the returns of Thai shares may depend on the economic conditions and whether the growth of innovative business models can keep pace with the changing world," she said.

Published : January 26, 2021

By : The Nation