Thai index fund investment account - which bank is best?

[Barnabe]

I’m looking to open a family investment account here in Thailand to invest a bit every month (sort of replacement for a savings account since those are worthless these days).

Since my trust in Thai institutions is not high, I’d like to do it in one of the major banks. I’ll be investing in a SET index fund plus a couple of foreign funds on a monthly basis, keeping it simple. I won’t be investing in individual stocks, and the idea is to keep it long term.
 

Can anyone recommend such an account? Which one have the cheapest funds on offer, easy to manage online, etc?

[Oxx]

(1) Being pedantic, you can not invest through a bank.  You could invest through a bank's asset management arm, or through a banks' securities arm*.  The former typically only allows you to invest in the bank asset management firm's own funds, but it convenient because you can open an account at your local bank branch.  The latter would typically give you access to the full range of available funds (including from other asset management firms) as well as trade on the SET, but you won't be dealing through your local bank.

 

(2) For investing the SET index, it should be cheaper (i.e. lower charges) to invest in an ETF than in a mutual fund, which would require the latter type of account.

 

(3) Personally I think investing in the SET is not a good idea because of its composition.  27% of the SET is in Energy & Utilities - not sectors I would expect to perform particularly well over the coming years.  Conversely, less then 9% is in Information & Communication Technology which has been booming.

 

 

* For example:

Bank = Krung Sri/Bank of Ayuddhya

Asset management firm = Krung Sri Asset Management

Securities firm = Krung Sri Securities

 

or 

 

Bank = Bangkok Bank

Asset management firm = BBL Asset Management (it uses the brand name "Bualuang)

Securities firm = Bualuang Securities

 

[Barnabe]

Thanks for the reply - so this means their assets or securities arm goes bust, the main bank won’t be liable for my loss right?

 

Is there an equivalent protection body to the U.K. FSCS here in Thailand?

 

Good points on the SET. I will only invest a small % of it on it, the rest will be on foreign index funds.

[Oxx]

1 hour ago, Barnabe said:

Thanks for the reply - so this means their assets or securities arm goes bust, the main bank won’t be liable for my loss right?

True.  However, your assets will be held in an account separate from the company's finances, so should not be affected if the company goes bankrupt.  However, it may take some time to get your investments/money back.

 

There is also a risk that if someone has been illicitly siphoning assets from the client account, there will be a shortfall, so you may not get everything back.  However, this really is a minuscule risk.

 

1 hour ago, Barnabe said:

Is there an equivalent protection body to the U.K. FSCS here in Thailand?

 

No.  But let's be frank:  UK investor protection is pretty worthless.  Personally, I lost a vast amount of money when Equitable Life went under; I got back 22% of my investment, even though the investments themselves were 100% intact.  I also lost money when a hedge fund manager, Magnus Peterson, decided to defraud his customers.  He ended up in jail, but I lost my entire investment in his fund; his fraud lost investors $530m, and he only got a 13 year sentence.  (I'm not normally a supporter of capital punishment, but in his case I'd make an exception.)   I am also a victim of the Arch Cru fiasco/fraud.  Years later I'm still waiting to get some of my money back.  So, it pays to spread your investments around and to expect occasionally to be defrauded on some of them.

 

Incidentally, I probably should have mentioned that if you're looking for long term investment and are working here, do look at the really rather generous tax benefits associated with LTFs (and possibly RTFs).  These might outweigh the higher fees over an ETF.