The Thai ESG Extra (ESG X) funds launched this month are expected to promote the sustainability of Thai listed companies and help revive the Stock Exchange of Thailand (SET).
The bourse has faced severe selling pressure this year, particularly after the US tariffs were announced, as investors were concerns about significant economic impacts.
Available from May 2, investors can subscribe to 37 Thai ESG X funds that offer tax benefits of up to 800,000 baht, including the option to transfer investments from long-term equity funds (LTFs).
The tax refund amount for new investment in Thai ESG X funds is capped at 300,000 baht for the 2025 tax year. Meanwhile, up to 500,000 baht can be transferred from LTFs to Thai ESG X funds, with refunds spread across the 2025-2029 tax years.
"The initiative not only aims to deliver long-term returns to investors, but also enhance the stability of Thailand's capital market and promote sustainable development," said Chavinda Hanratanakool, chairwoman of the Association of Investment Management Companies.
Thai ESG X funds should help listed companies and bond issuers achieve their carbon neutrality and net-zero goals, she said.
According to Mrs Chavinda, all asset management companies offering Thai ESG X funds are required to integrate environmental, social and governance factors into their investment selection and risk assessment processes, including climate-related risks.
Investors can transfer LTF units to Thai ESG X funds from May 13, and all transactions must be completed by June 30, 2025 to qualify for the tax benefits.
THREE INVESTMENT STYLES
Finnomena, a leading mutual fund platform, said the 37 Thai ESG X funds have three distinct investment styles, with the first 100% Thai equities. These funds are ideal for investors who are confident in the Thai stock market's potential for a rebound.
Second are funds with 80% investment in Thai equities and 20% in global stocks. This strategy is designed for investors seeking tax savings, diversification, and performance from global equities, according to Finnomena.
The third style is a 70/30 mixed portfolio of Thai equities and ESG bonds. These funds are suitable for conservative investors looking for stable returns and lower volatility.
Full fund details and comparisons are available at www.finnomena.com.
Investors interested in Thai ESG X funds can contact asset management companies directly or through authorised distributors. For more information, visit www.ThailandESG.com.
BOURSE SHIELDED
Pote Harinasuta, chief executive of One Asset Management (ONEAM), said the company is focusing its investments on domestic consumption-driven sectors, which are expected to outperform other industries over the next 1-2 months, comprising telecom technology, commerce, healthcare and banking.
"The Thai stock market had a significant correction and now offers opportunities for investors to gradually accumulate quality stocks," said Mr Pote.
Low inflation, a recovery in consumption, and a resilient tourism sector all support market sentiment. However, geopolitical tensions are pushing consumer goods prices higher, while structural issues in the Thai economy, export challenges from US tariffs, and domestic political risks continue to pose headwinds, he said.
ONEAM expects the SET index to range between 1,110-1,235 points for the remainder of 2025.
Apichart Phubancherdkul, head of strategy research at Tisco Securities, said the SET is in a recovery phase, driven by optimism over global trade negotiations and liquidity from Thai ESG X funds.
He said fresh capital is expected to flow into the equity market, in line with ESG fund policies. However, the index upside may be limited to 1,200 points, said Mr Apichart.
Thai ESG X funds are expected to target SET50 stocks with an ESG rating of A or higher, strong earnings growth, and a fundamental upside of more than 20%, according to Tisco. Stocks likely to benefit from first-quarter earnings speculation also hold potential, noted the brokerage.
Tisco sets key support levels for May at 1,155-1,160 points, with further downside support at 1,140 points, and resistance levels of 1,200-1,210 and 1,250 points, respectively.
Asia Plus Securities (ASPS) said Thai ESG X funds should help shield the SET from the impacts of rising political uncertainty.
"Political uncertainty could cause the SET and fund flows to fluctuate, following a 17% contraction of the Thai index in the first four months," said the brokerage.
In the first week of May, institutions recorded net buying of 5.1 billion baht, and "fund inflows from Thai ESG X funds will support the index", noted ASPS.
AVAILABLE FUNDS
According to the Securities and Exchange Commission (SEC), the approved Thai ESG X funds as of April 30 are as follows:
Krungthai Asset Management launched three new Thai ESG X funds, including KTEQ70PLUSX, which invests at least 70% of its net asset value (NAV) in ESG-rated stocks, and up to 30% in ESG bonds or other assets in Thailand and abroad.
KTEQPLUSX allocates at least 80% of NAV to ESG-rated stocks, with up to 20% in other assets or overseas investments. KTEQDIVX targets SET and MAI-listed stocks with strong fundamentals and consistent or potential dividend payments.
Krungsri Asset Management offers three Thai ESG X funds, starting with KF70-THAIESGX, aiming to create balance by dividing investments into stocks and bonds. KFS50-THAIESGX focuses on investing in large companies with good and stable ESG ratings, while KFAEQ-THAIESGX provides a proportion of overseas investment to help spread risk.
Kasikorn Asset Management issued K-HDThaiESGX, which is focused 100% on high dividends and sustainable stocks, while K-70ThaiESGX is a mixed fund investing 70% in sustainable high-dividend stocks and 30% in ESG debt instruments.
Kiatnakin Phatra Asset Management launched KKP BL THAI ESGX, a mixed mutual fund with a focus on assets in the sustainability group and equity instruments with a policy of consistent dividend payment and/or a potential to pay dividends in the future. The fund will also invest in debt instruments issued by governments, commercial banks and companies.
KWI Asset Management unveiled the KWI Thai ESGX fund, focused on sustainable investing in stocks with strong corporate governance, employing a research-driven stock selection strategy combined with a comprehensive ESG integration investment process.
Talis Asset Management offers the MEGA20 and MEGA10 series, which offer tax deductions according to the criteria set by the Revenue Department.
Tisco Asset Management issued the Tisco Open-Ended Fund 70 Thai Equity for Sustainability Special Investment Type (TThai70ESGX-S) and the Tisco Open-Ended Fund Thai Equity for Sustainability Special Investment Type (TThaiESGX-S).
SCB Asset Management offers Thai ESG X funds in four styles. The first is mixed, titled SCBT70X and investing a maximum of 70% in Thai stocks and outstanding ESG debt instruments. The second is dubbed active, investing in Thai stocks with outstanding ESG ratings and a maximum of 20% foreign stocks.
The third style is represented by SCBTAX, which selects outstanding Thai ESG stocks with strong fundamentals exceeding market norms. The final style is passive, with SCBTS100X focusing on outstanding ESG Thai stocks for 80% of its total investment.
Principal Asset Management launched the Principal Select Special Thai Equity Fund (PRINCIPAL SEQTESGX) with a focus on quality ESG dividend Thai stocks. The fund targets proactive fund management to beat the benchmark index over the long term by selecting quality stocks using its fundamental, momentum and valuation as well as ESG scoring strategies.
BBL Asset Management offers three types of Thai ESG X funds, including the low-fee, low-beta BMDIV-TESGX fund, which invests in sustainable stocks up to a maximum of 70% that must pay dividends or have low price movements, according to the SET index.
The second is BM70-TESGX, which invests in stocks that are growing and have a good financial status, up to a maximum of 70%. The third fund type is called BEQD-TESGX, focused on dividend sustainable stocks.
Bangkok Capital Asset Management offers BCAP-SETTHAIESGX, investing in Thai stocks with sustainable business operations and a passive management style.
Phillip Asset Management launched Phillip Mixed Thailand ESG Extra Fund (P-MESGX), offering active management to generate returns that seek to beat the reference index. The fund focuses on ESG stocks, environmentally friendly debt instruments, and bonds promoting sustainability, with ESG ratings of BBB or higher.
UOB Asset Management offers two Thai ESG X funds: The United Mix 2/70 Thai Sustainable Special Fund (UMIX-TESGX) and United Thai Equity Sustainable Special Fund (UEQ-TESGX). These funds aim to provide sustainable long-term returns as well as tax benefits.
Land and Houses Fund Management offers the LH Flexible Thai Special Sustainability Open-Ended Fund (LHTHAIESGX), with a policy to invest in securities that pass the SEC's sustainability criteria, up to a maximum of 80% of the fund's NAV. A minimum of 65% of investment must be in Thai stocks, focused on quality names in the SET50 Free Float Index that have a stable financial position and tend to pay consistent dividends, are actively managed and adjust strategies according to market conditions.
ONEAM launched the ONE-THAIESGX-X fund, offering an active management strategy and broad diversification across more than 100 companies. The fund focuses on 40-50 fundamentally strong companies. Investors can transfer their LTF units into the new ONE-THAIESGX-L fund from May 13.
Aberdeen Asset Management (Thailand) offers the Aberdeen All Seasons Thai Special Sustainable Open-Ended Fund (ABALL-TESGX), investing in a mix of stocks and debt instruments in the sustainability group. The fund highlights the strength of adjusting investment portfolios to suit all market conditions.
East Spring Asset Management (Thailand) offers two new funds. The first is Eastspring Open-Ended Fund, Dividend Stock 70, Thai for Special Sustainability (ES-DIV70THAIESGX), which invests in Thai stocks with good dividends and ESG debt instruments. The other is the Eastspring Open-Ended Fund, Thai Dividend Stocks for Special Sustainability (ES-DIVTHAIESGX), which utilises an active investment strategy by focusing on stocks with a SET ESG rating of AA or higher that consistently pay good dividends.
MFC Asset Management launched the MFC Thai Sustainable Equity Fund (MEQUITY-Thai ESGX), MFC Hi-Dividend Thai ESGX Special Sustainable Fund (HIDIV-Thai ESGX), MFC FTSE Shariah Investment Thai Sustainable Special Fund (MIF-Thai ESGX), and the MFC Mixed Thai Sustainable Fund (MIX-Thai ESGX) to suit the demands of investors who can tolerate different degrees of risk.
Asset Plus Fund Management introduced two funds, including the ASP-DEQ ThaiESGX Fund, which invests in large stocks with high dividends. The ASP-MIX ThaiESGX Fund invests in a mixture of Thai stocks and government bonds that are recognised for their ESG ratings.