THURSDAY, March 28, 2024
nationthailand

More investment in mutual funds seen in last quarter

More investment in mutual funds seen in last quarter

DESPITE market volatility, Thai mutual funds’ net asset value (NAV) is expected to exceed Bt5.5 trillion on the expectation of Bt20 billion to Bt40 billion being invested in long-term equity funds (LTFs) and Thailand Future Fund (TFF) in the last quarter, investment research firm Morningstar Research (Thailand) said.

A fund analyst with Morningstar said the last quarter will see more capital moving into mutual funds, particularly LTFs and TFF.
In the first nine months of this year, Thailand's mutual fund industry has been relatively volatile, registering a 0.47 per cent rise in net asset value (NAV) from the end of last year, to Bt5.04 trillion, she said.
Thailand has seen a net outflow of capital worth Bt40.425 billion in the third quarter, continued from the previous quarter after capital inflows for 12 consecutive quarters. In the first nine months of this year, net outflow of capital totalled Bt24.142 billion.
She said that given the upward trend in interest rates, which affects returns on fixed income, uncertainty over taxes on fixed-income funds and some positive economic indicators, investors are expected to avoid fixed income investment and shift their capital to equity funds. This is particularly in case of those investing in promising companies listed on the Thai stock exchange.
Despite the US-China trade war, depreciation of the Turkish lira that fuelled concerns over emerging market investments and the US interest rate hike, the Stock Exchange of Thailand Index closed 10.08 per cent higher at 1,756.41 at the end of the third quarter. This was after Thailand's better-than-expected economic expansion of 4.6 per cent in the second quarter.
In the third quarter of this year, large-cap equity funds recorded the highest net capital inflow of Bt71.794 billion with a combined NAV of Bt702.575 billion, followed by property-indirect global funds with net inflow of Bt31.740 billion, aggressive allocation funds with net inflow of Bt28.878 billion, conservative allocation funds at Bt20.694 billion and global equity funds at Bt17.166 billion.

Largest net outflow 
Global bond funds suffered the most net capital outflow of Bt83.058 billion in the nine-month period, trailed by money market funds’ Bt65.317 billion, mid-long term bond funds’ Bt18.937 billion, global healthcare funds’ Bt17.912 billion and global high yield bond fixed- term funds’ Bt16.799 billion.
Thai equity funds excluding LTFs and retirement mutual funds (RMFs) have been on a recovering path in the third quarter with net capital of Bt8.874 billion flowing into large-cap equity funds and Bt1.472 billion exiting small and mid-cap funds.
In the first nine months of this year, net capital of Bt68.109 billion moved into large-cap equity funds despite a combined medium return of 0.21 per cent, while Bt2.421 billion moved out of small to mid-cap equity funds whose return remained negative at 4.46 per cent.
Thai equity funds excluding LTFs and RMFs, at the end of September, booked a 24.53 per cent increase in NAV to Bt305.467 billion, from the end of last year.
Thanachart Fund Management managed to capture the highest share of 15.49 per cent in the Thai mutual fund market, followed by Bualuang Asset Management’s 15.08 per cent, Krungsri Asset Management’s 13.08 per cent, SCB Asset Management’s 13.03 per cent and Kasikorn Asset Management’s 9.14 per cent.
“Small and medium-sized banks started to play in the equity mutual fund market this year and have a chance to overtake large-sized banks,” the analyst said.
In the first nine months, LTFs recorded a total net outflow of Bt1.746 billion. The long-term funds booked a net outflow of Bt13.712 billion in the first quarter with net inflows of Bt8.831 billion and Bt3.135 billion in the second and third quarters, the analyst said while expecting most of capital to flow into LTFs in the last quarter.
LTFs registered a 1.83 per cent decline in NAV from the end of last year to Bt389.932 billion at the end of September.
RMFs recorded Bt7.998 billion in total net inflow for the first nine months of this year, with a 2.62 per cent rise in NAV from last yearend to Bt261.301 billion. 
 

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