Investors looking to buy tax-deductible mutual funds in the last week of the year should focus on retirement mutual funds (RMFs) that invest in blockchain technology and artificial intelligence (AI) because they generated the highest investment returns in this year, says Morningstar Research (Thailand).
The firm said these RMFs generated double-digit returns on investment for one-, three- and five-year periods, with the best returns occurring this year.
Even as the investment outlook fluctuated greatly globally, RMFs are a proven choice for investment diversification, while the Thai bourse declined by almost 20% this year, said Morningstar Thailand.
These RMFs can diversify investment into global equity and foreign bonds, resulting in substantial returns, said the Thai unit of the US financial services firm.
RMFs that generated the highest returns this year are Asia Plus Digital Blockchain RMF, Krungsri Global Technology Equity RMF and Tisco Next Generation Internet RMF, with returns of 59.5%, 40.3% and 38.3%, respectively, said Morningstar.
"RMFs that generated high returns in 2023 invested in blockchain technology, innovation and AI, with the value of stocks in these funds moving in the same direction as the US stock market," said the research house.
Past returns are no guarantee of future performance as various factors affect investment in assets, said Morningstar.
Asset allocation and investment diversification can help reduce risk and ultimately achieve targeted returns, said the firm.
To deduct taxes for RMF investment, investors must continue to invest in RMFs annually, not pausing purchases for more than one year in a row.
They must hold the investment units for at least five full years and cannot sell RMFs until age 55.
The purchase of RMFs must not exceed 30% of taxable income or total more than 500,000 baht when combined with Super Savings Funds and the contribution to provident funds, government pension funds, welfare funds, the National Savings Fund and pension insurance.
As an RMF investment strategy this year, many investment management companies have recommended asset diversification.
For example, Tisco Asset Management recommends investing in Thai stock funds, global healthcare, global tech stocks and Vietnamese equity funds.