Allocation of investment portfolios to foreign stock markets is still recommended for opportunities to earn handsome returns from the global economy, says an investment adviser.
Investment in global equities still offers attractive returns compared with safe-haven assets offering low returns, said Simon Grose-Hodge, managing director and head of investment advisory at LGT Bank.
"Equities are still more attractive than bonds as the global economy shows strong signs of recovery," he said.
Many companies have high growth potential including Gilead Sciences Inc, a leading biotech company with expertise in Aids treatments; Daimler, a luxury-car maker; Starbucks; Google Inc; and Mitsui Fudosan, Japan's largest property developer, said Tragoolchitr Jittasaiyapan, chief investment officer at Thanachart Fund Management (TFund).
Yesterday, TFund introduced a one-year foreign investment fund investing in global stocks.
The T-Allstar1 fund will focus on the information technology and discretionary consumer product sectors, with a minor stake in the automobile, financial, energy, healthcare and industrial sectors.
Some 42.9% will be allocated to US investment, 35.7% in Asia excluding Japan, 14.3% in Europe and 7.1% in Japan.
The euro zone is not aggressively pumping money into its economic system, and stocks there remain undervalued, said Mr Tragoolchitr. Stocks in Europe could rise if the European Central Bank decides to inject money in the system to dispel deflation risk.
For bond investment, he suggests investment in short-ended notes, as the potential interest hike poses risk to long-term notes.
T-Allstar1, with a projected asset size of 1 billion baht, is expected to hedge 80-90% against currency risk.
Its initial public offering is slated for Aug 5-19 at Thanachart Bank, with a minimum subscription of 1,000 baht.
TFund has assets under management worth 159 billion baht, up by 18% from 134 billion last year.
TFund managing director Boonchai Kiattanavith said the SET index could hit 1,600 points in the next couple of months, but the market correction could last until September, dipping to 1,450 points after a rally following the May 22 coup.