Sales of Thailand ESG (TESG) funds, the latest tax-deductible long-term fund to be introduced by 16 asset management firms, reached 5.2 billion baht during the period Dec 8-28, 2023, falling well short of the government's 10-billion-baht target.
Chavinda Hanratanakool, chairwoman of the Association of Investment Management Companies, attributed the shortfall to the limited window for sales, although she said the funds received strong interest from the public.
The authorities now expect TESG funds to generate more than 10 billion baht in sales this year, said Ms Chavinda, who is also chief executive of Krungthai Asset Management (KTAM).
The 16 asset management firms launched a total of 30 ESG funds for investors to select from, which were made available in early December 2023. Investors can deduct their investment in such funds for the 2023 tax year.
The cabinet approved tax incentive measures to encourage sustainable investment in Thailand during a 10-year period, from 2023 to 2032.
Individuals with taxable income can benefit from a tax deduction of up to 30% of their assessable income, with a maximum limit of 100,000 baht per tax year.
This deduction can be applied when purchasing units of any TESG fund, provided the investment units are held for a minimum of eight years from the date of purchase.
TESG funds primarily invest in domestic assets, such as stocks or debt securities, with a focus on environmental protection and sustainability.
According to Ms Chavinda, the value of SCB Asset Management's (SCBAM) sales took the top spot at 1.13 billion baht from six TESG funds on offer, followed by Kasikorn Asset Management with sales reaching 1.12 billion baht, BBL Asset Management with 817 million baht, and Kiatnakin Phatra Asset Management and KTAM with sales of 570 and 551 million baht, respectively.
Narongsak Plodmechai, chief executive of SCBAM, said the company views the Thai stock market this year as having a high chance of recovery based on lower interest rates, while exports and private investment are expected to rebound on improving global trade.
Those factors should benefit listed Thai companies, which should post higher profits this year than in 2023, said Mr Narongsak.
"This is an opportunity to accumulate investments in TESG funds to obtain more tax deductions in the 2024 tax year," he said.
"TESG is a long-term investment option that supports the economy and society to grow and move towards sustainability."