KSAM Urged Thai Investors to seek investment opportunities overseas through Foreign Investment Fund (FIF), expressing optimism in the growing healthcare sector, emerging Asian markets and recovering Japan.
Although the global economy is currently exhibiting dim prospects, many countries remain positive as signs of recovery begin to surface as a result of several economic stimulus initiatives undertaken across different markets. Now that the Thai economy is showing signs of instability which many believe to be temporary, Krungsri Asset Management Co., Ltd (KSAM) meanwhile recommends Thai investors to diversify their portfolios and distribute the risks by seeking investment opportunities through the Foreign Investment Fund (FIF) in order to increase revenues and return on investment (ROI).
Opening speech by Alan Kam, Directorof Krungsri Asset Management Co., Ltd.
In line with this, KSAM recently organised a seminar entitled “Krungsri Asset Management Global Fund Forun 2015 – Connecting a World of Investment Opportunities” at Siam Kempinski Bangkok Hotel, with expert fund managers from reputable global fund houses, including J.P. Morgan Asset Management, Eastspring Investments Singapore and Schroder Investment Management, to provide updates on global economic trends and criteria on how each fund house evaluates assets for investment prospects. The seminar aimed at providing guidelines for investors on how to make the right investment decisions. The three fund houses are all master funds carefully selected by KSAM so that Thai investors can wisely choose the fund that best corresponds to their specific investment objectives and according to current global economic trends. The three selected funds include the J.P. Morgan Funds Global Healthcare Fund, which focuses on investment in global healthcare companies, Eastspring Investments Japan Dynamic Fund, which is focused on the Japan stock market; and the Schroder Asian Income Fund which focuses on investments in quality stocks and fixed income within the Asian region, so that investors can get returns from both dividends and increases in fund prices.
From left: Elvina Lee, Client Portfolio Manager, J.P. Morgan Asset Management; Michael Wooley, Client Portfolio Manager, Eastspring Investments; Pang Kin Weng, Fund Manager, Schroder Investment Management; Supaporn Leenabanchong, Acting Chief Investment Officer of Krungsri Asset Management Co., Ltd.
Elvina Lee, Client Portfolio Manager from J.P. Morgan Asset Management, stated that the healthcare sector is growing significantly in several regions around the world, especially in the United States, Europe and Japan as well as in Asia. As an example, she cited China that has put emphasis on the healthcare industry and regards it as one of its top priorities for reforming the country. The major factors behind the growth of the healthcare sector include the growing aging population, which constitutes increased spending on healthcare services, as well as the ongoing dramatic changes in the overall healthcare industry propelled by advancements in medical technology that greatly help reduce time and cost in the invention of new medicines as well as in the provision of medical treatments and services. She also mentioned Genome Sequencing, part of ongoing studies into human genetics, that enables drug companies to discover and create new medicines for rare medical conditions.
Michael Wooley, Client Portfolio Manager from Eastspring Investment, said that many Japanese companies have restructured their businesses in order to overcome the economic hurdles. As a result, businesses performed better and revenues have increased. One of the factors that has driven business growth in Japan is the country’s Pension Fund. Today in Japan, investing in the Fund helps gain income from investment. This is one of the factors that motivates Japanese companies to try to improve their business performance. He said this is still the right time to invest in Japan’s market as there are a lot of companies that are performing well, can make good profits, but remain undervalued. Furthermore, Eastspring Investments also has a strict process in selecting assets for investment. Instead of riding the bandwagon, Eastspring Investments focuses on assets that may have been overlooked in the market and so still carry low price tags. After which, it carefully evaluates each asset before making any investment in order to determine profit generating potential and sustainable and long term growth prospects. This way, investors are assured and can invest with more confidence.
Pang Kin Weng, Fund Manager from Schroder Investment Management, explained that Asia is the emerging market with the highest growth potential compared to other emerging markets in other regions. This is due to urbanisation and industrialisation that continue to drive economic growth in the region. Because of this, there are plenty of investment opportunities for long term income and profit generation. The Schroder Asian Income Fund focuses on investing in companies that possess high growth potential based on good corporate governance, in regional properties through REITS, and those with good quality fixed income. However, there are still some risks looming in the Asian market due to rising interest rates in the US as part of its economic recovery measures. This means that operating costs of companies with foreign loans are more likely to have an upswing. The increase in interest rates, however, is gradual, which means more time for companies to readjust. Meanwhile, the fund tries to be flexible in managing portfolio exchange rate risks to ensure more favourable profit prospects for investors.
Meanwhile, Mrs. Supaporn Leenabanchong, KSAM’s Acting Chief Investment Officer, said at the seminar that although the Thai stock market is still competitive when compared to neighbouring countries like the Philippines and Indonesia, with a P/E ratio at 13.7 times, there are several risks such as the sluggish growth of export volumes and lower GDP growth projections announced by the government. Because of this, investors are urged to closely monitor the country’s economy in the second half of the year. She advised Thai investors to distribute the risks by investing in FIF.
“KSAM has carefully selected the world’s leading FIF for Thai investors by Morningstar’s Qualitative and Quantitative Screening. We also consider the risks and market fluctuation that we think is most appropriate for the Thai investors. Each fund will be carefully selected by our own specialist team together with the experts from these world-leading fund houses to create confidence among Thai investors as much as possible,” Mrs. Supaporn explained.
Mrs. Supaporn pointed out the proper allocation of assets in this situation is to invest 25% in the Thai stock market, 21% in developed markets, 9% in emerging markets, 27.5% in fixed income, 12.5% in global bond funds and 5% in gold funds. At present, KSAM has a wide choice of FIFs covering all types of assets from around the world, enabling investors to get more investment opportunities and gain more returns on investment. -- Advertorial
