Mutual fund sector grew 6.2% in first half

Mutual fund sector grew 6.2% in first half

Property, global tech and China-focused investment generated best returns

Investment in Thailand's mutual fund industry expanded by 6.2% year-on-year during the first half, with property funds and global technology equity funds generating the biggest returns.

Net asset value of the country's mutual fund industry rose by 90 billion baht to a total of 5.3 trillion baht between January and June, with fund inflows moving into fixed-income funds to the tune of 120 billion baht, according to Morningstar Thailand.

Chayanee Juengmanon, senior research analyst at Morningstar Thailand, said the combined net asset value of mutual funds, excluding exchange-traded funds, real estate investment trusts and infrastructure funds, stood at 4.2 trillion baht at the end of June, up more than 6% from year-end 2018.

All types of mutual funds registered an increase in net asset value except for money market funds, which saw a 1.8% decline amid a lower interest-rate outlook, Ms Chayanee said.

Property funds generated the biggest return during the first six months at 20.9%, followed by global technology equity funds (19.3%) and China investment funds (15.4%), according to Morningstar Thailand.

Investment funds logging the most inflows during the first half were those investing in foreign fixed-income securities at a combined 163.35 billion baht, while funds registering the most outflows were those investing in short-term bonds at 36.88 billion baht.

Fixed-income funds still make up the better part of Thailand's mutual fund sector, at 47.5% of total market value, followed by equity funds (28.9%) and money market funds (13.6%).

The mutual fund industry saw 327 investment funds launched during the first half. Of those, 252 were term funds, including those investing in foreign fixed-income securities and fixed-term high bond yield with a total investment worth 560 billion baht.

Separately, AIM Commercial Growth Leasehold Real Estate Investment Trust (AIMCG) debuted yesterday on the Stock Exchange of Thailand.

AIMCG's initial assets, valued at up to 2.88 billion baht, include commercial leasehold interests at UD Town in Udon Thani province, Porto Chino (outbound lane of Rama II Road in Samut Sakhon province) and 72 Courtyard (Sukhumvit Soi 55), all of which are lifestyle malls with potential to generate decent returns.

Sittichai Mahaguna, head of the investment banking group at Bank of Ayudhya, AIMCG's financial adviser, called the REIT a good investment choice for investors seeking better diversification through assets that produce stable returns at higher rates than those of bank deposits.

The first-year distribution payment is estimated at 8%.

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