As global stock markets have continued to rebound from the previous rout, investment in foreign equity funds in China and the US are recommended because of their likelihood of generating high returns going forward, say asset managers.
Saharat: Good time for US tech stocks
In February, US technology stock prices have dropped by 7.9% from their peak in January, making it a good time to invest as the recent stock market correction did not result from an economic slowdown or lower revision of net profit earnings, said Saharat Chudsuwan, head of marketing, wealth advisory and mutual and private fund business at Tisco Asset Management.
US tech stocks have generated returns that beat the S&P 500 index for all investment maturities, comprising one year, three years, and five years, he said.
Over the past five years, tech stocks generated a return on investment of 19%, while the S&P 500 earned 15.8%.
Tisco Asset Management is set to launch Tisco US Technology Trigger 5m#1 (TTECH5M1) this week, an open-end foreign investment fund focused on US tech stocks.
The Tisco fund is a trigger fund that has a target return of 5% within five months.
China's stock market is interesting because listed firms' net profits are poised to rise from increasing global demand for goods and services, said Navin Intharasombat, chief investment officer at Kasikorn Asset Management (KAsset).
Chinese stock prices are also the lowest compared with stock prices in other regional markets, said Mr Navin.
KAsset said China's stock market will generate positive long-term returns as the country's GDP growth is expected at 6% this year, driven by investment, consumption and international trade.
The Chinese government also has a plan to develop infrastructure to serve the country's long-term growth, he said.
KAsset offers K-China for investment in the country through a master fund -- Fidelity Fund-China Focus. The fund targets investment in Chinese fundamental stocks.
The return over the past six months is 23.2%, while the return over one year stood at 46.1%.
Poranee Thongyen, senior executive vice-president at Asia Plus Securities, said the firm recommends holding around 60% in cash and embarking on accumulative buying of domestic stocks that will gain from Asian economic growth.
Separately, the Stock Exchange of Thailand (SET) index rose by 4.2% in January from the end of 2017, while combined market capitalisation of the SET and the Market for Alternative Investment (MAI) index was registered at 18.7 trillion baht.
Combined daily turnover of the SET and MAI at the end of last month stood at 78.8 billion baht, up 35% year-on-year.
The SET index also registered an all-time record high since its inception in 1975, closing at 1,838.96 points on Jan 24.
The forward price-to-earnings ratio of the Thai bourse stood at 16.6 times, higher than the average forward P/E ratio at 15.26 times of other Asian stock markets.