Investors are urged to invest in emerging market stocks except for China, which faces risks from declining economic growth and geopolitical conflict, according to Kiatnakin Asset Management (KKPAM).
With the global economy expected to recover this year as interest rates dip, investors should look to emerging market stocks to capture high returns, said Yuthapol Laplamool, managing director of KKPAM.
"As the interest rate hike cycle has come to an end and rates are poised to fall, this will attract capital to emerging market equities, which are expected to have net profit growth of 16% this year. The global stock market has estimated profit growth of 7%, thanks to a recovery of the semiconductor group in both Taiwan and South Korea," he said.
The price-to-earnings level of emerging market stocks is 11.1 times, still cheaper than the stock market globally and the average of emerging market equities the past five years, said Mr Yuthapol.
"The brokerage views investment in the sector excluding China as attractive, as factors depressing China's economic growth will take time to resolve," he said.
KKPAM is offering two funds in this vein: Emerging Markets Ex China-Unhedged (KKP EMXCN-UH) and Emerging Markets Ex China-Hedged (KKP EMXCH-H).
The two funds aim to provide returns in line with the MSCI Emerging Markets ex-China Index, which covers investments in stocks in 23 countries excluding China.
"These funds are alternatives for investors who want to diversify their investments and find growth opportunities from stocks in emerging markets," Mr Yuthapol said.
The funds' initial public offering is scheduled for today and tomorrow, with a minimum purchase value of 1,000 baht.
The KKP EMXCN-UH fund does not invest in derivatives contracts, while the KKP EMXCN-H fund does invest in derivatives, with a ceiling of 90% of its foreign investments to minimise foreign exchange risk, he said.