LTFs still hot choice for investors looking for tax breaks
Long-term investment funds (LTFs) remain highly popular among individual investors thanks to their associated tax benefits.
During the Stock Exchange of Thailand’s four-day fund fair that ended on Sunday, about 4,800 LTF transactions were struck for a total investment of Bt485 million. Of total transactions of more than 8,000, more than 2,900 were for retirement mutual funds (RMFs), totalling Bt276 million. The rest were for unit trusts in other mutual funds.
Total investments at the fair amounted to Bt1.17 billion, up by 70 per cent from last year’s event.
Krungsri Asset Management alone welcomed new LTF and RMF investment of Bt190 million at the fair. Chief executive officer Chatrapee Tantixalerm suggested that investors interested in LTFs and RMFs should pick funds suiting their financial condition and risk appetite. They should also examine the fund’s track record for up to five years and should not rush to buy a fund on the last day of each year.
Individuals are allowed an income-tax deduction of up to Bt300,000 in each tax year for investments in RMFs and LTFs.
Bualuang Asset Management (BBLAM) managing director Voravan Tarapoom said several old and new clients had bought into the company’s LTFs and RMFs this month, pushing the net present value of the two types of funds to Bt57.96 billion as of December 21, up by 51.12 per cent from Bt38.35 billion at the end of last year.
"We witnessed huge LTF redemption early this year. Yet new investment is also of huge value," she said.
"Moreover, we have witnessed increasing demand from new investors, who do not look for short-term returns through investments of a short period or a year. They thoroughly study mutual funds and the investment policies of each company. Then they decide to invest with the companies they like the most."
Voravan said BBLAM focused its attention on mega-trends, the long-term direction of the economy. Then it pinpoints those industries that will benefit from the mega-trends, and then companies that should perform well accordingly.
The "good stocks + good trade = good performance" investment theme has yielded successful results in the past 10 years, she said.
