SCB Securities (SCBS), Siam Commercial Bank's brokerage arm, has expanded its private fund products to include one investing in small- and mid-cap stocks to widen investment choice for long-term investors.
The firm has set a target of 1 billion baht in assets under management (AUM) for the new product this year.
The fund will plough into about 10 stocks _ small caps with market capitalisation below 4.7 billion baht each and mid-cap shares with capitalisation between 4.7 and 31 billion baht.
Pisithr Niyomtammakij, the fund manager for private portfolios, said the new fund will select companies with solid fundamentals, capable management, attractive valuation and strong earnings growth.
The fund's policy is flexible enough to allow shifting money to large-cap stocks to tap opportunities during market volatility.
Mr Pisithr said Thailand's five big trends remain intact: telecom investment, infrastructure spending, digital TV, the Asean Economic Community (AEC) and corporate and personal income tax cuts.
Those trends will propel the stock market over the next three years.
"We chose this highly focused strategy because small- and mid-cap stocks have hidden value," said chief executive ML Thongmakut Thongyai.
"Current large-cap shares grew from mid-caps, and good small-caps can rise to mid- and large-cap with time."
According to company research, from January 2006 to February 2013 the FTSE SET Small Cap Index saw a return of 183.8%, followed by mid-caps (118.2%) and large-caps (104.8%). The broad SET index yielded 102.1%.
The new product targets high-net-worth clients with AUM of at least 30 million baht each and a minimum two-year investment.
SCBS expects the fund to generate 14 million baht in revenue this year and 50 million baht next year.
ML Thongmakut said the company will also launch an AEC-centred private fund soon.
SCBS will revise up its net profit goal for this year from the current 300 million baht after hitting 60% of its full-year target during the first three months.