Only money market funds and foreign funds recorded net purchases in the first nine months of this year, while the overall mutual fund industry reported net outflows of 230 billion baht as investors divested high-risk funds amid market volatility, says Morningstar Research (Thailand).
Net mutual fund assets totalled 3.7 trillion baht as of the third quarter, with money market funds having the highest net assets of 700 billion baht and a net inflow of 54 billion baht.
The total of 700 billion baht was a slight decrease from the second quarter, but was up 8.9% compared with the end of last year.
Strong inflows were recorded in the first half of the year for money market funds, before changing to net outflows of 5.2 billion baht in the third quarter.
Foreign equity funds posted net inflows over the nine-month period, but the inflows started to decline in the third quarter.
Foreign equity and money market funds typically provide low returns because of the low risks associated with them, according to the research firm.
Open-end Thai mutual funds (excluding exchange-traded funds), real estate investment trusts and infrastructure funds had a total net asset value of 3.7 trillion baht, a 2.6% drop from the previous quarter and 13.1% from the end of 2021, said Morningstar.
In the third quarter, net outflows of 25 billion baht were tallied for the overall mutual fund industry, pushing the nine-month cumulative outflow to 230 billion baht from equity funds, fixed-income funds, mixed funds and money market funds, said the research firm.
Fixed-income funds recorded the highest net outflow in the third quarter at 11 billion baht, leading to an outflow of 240 billion for the nine-month period, attributed to the upward trend in interest rates.
Most of the outflows were reported in the first half, before slowing in the third quarter as term funds were launched and attracted high inflows.
The net asset value of equity funds stood at 1.3 trillion baht, with net outflows of 6.2 billion in the third quarter and 2.3 billion for the nine-month period.
Long-term equity funds were heavily sold on profit-taking during the second quarter, when the bourse gained, according to Morningstar.
Oil, gold and commodity funds had a net asset value of 28 billion baht, down 10.2% from the end of 2021. In the third quarter, net inflows amounted to 1 billion baht, of which 760 million flowed into gold funds when gold prices were on the decline because of the strong US dollar, said the research firm.
Net outflows from oil funds occurred as oil prices started to fall on concerns of a possible global recession, said Morningstar.
Commodity funds had a nine-month net outflow of 2.4 billion baht.
Notably, global equity funds posted their first net outflow in more than two years. Such funds had a net asset value of 160 billion baht in the third quarter, a contraction of 7.1% from the previous quarter and a 28.8% decrease from the end of last year, with a negative nine-month return of 30.1%.
In the third quarter, global equity funds had net outflows of 500 million baht, the first period of net outflows in 11 quarters. For the first nine months this year, the segment posted net inflow of 12 billion baht.