Recommended Mutual Funds? (not Satisfied With Low Interest Rates On New Fixed Deposits)

[trajan]

Does anyone have any experience with (or are invested in funds of) any of these outfits (or other recommended companies) and can recommend any particular funds?

medium term play (for the future) with some risk, but better returns than those dismal fixed deposits?.....

TMB Asset Management

Aberdeen Asset Management

Thanachart Asset Management

Kasikorn Asset Management

Auydhya JF Asset Management

Tisco Asset Management

ING Mutual Funds Management

UOB Asset Management

KT Asset Management

One Asset Management

[Irene]

Does anyone have any experience with (or are invested in funds of) any of these outfits (or other recommended companies) and can recommend any particular funds?

medium term play (for the future) with some risk, but better returns than those dismal fixed deposits?.....

TMB Asset Management

Aberdeen Asset Management

Thanachart Asset Management

Kasikorn Asset Management

Auydhya JF Asset Management

Tisco Asset Management

ING Mutual Funds Management

UOB Asset Management

KT Asset Management

One Asset Management

Stick to the SET 50 Index Fund set up by SCB Asset Management. The fund moves with the up and down of SET 50 Index. PTT, BBL, SCC and Advanc represent more than half of the value of the index. Timing is important when to buy. Wait for crisis and buy.

In another few months, a new fund will be set up called ETF, (Exchange Traded Fund of SET 50 shares). It again will move with the SET 50 Index. ETF has a better edge than the mutual fund since it will be traded on the stock exchange and fees are far cheaper. This is good for medium and long term investment.

[trajan]

thanks Irene!

yes, you are absolutely right about a crisis (or perceived crisis).... I directly bought a nice chunk of BBL right after I returned from last New Years holiday (and heard about the bombs in Bangkok)....sold them a few days ago... very nice indeed....

the Index Fund (and especially the ETF if traded on the exchange) sounds good...probably dont have to wait too long for a crisis (with this brillant government)...

[ThaiWanderer68]

I hold a few Aberdeen funds via different operations in different countries. Via the UK: Emerging Markets (GBP) and Property Share funds (GBP); Via Offshore : UK Opportunities D1 (GBP), via Singapore: Aberdeen Pacifi Equity (SGD). Via Thailand: Abderdeen Growth (THB) and Long Term Equiy Fund (THB).

Aberdeen Growth (formerly Nakornthorn Schroder Growth) was launch exactly 10 years ago today (18Jul1997)funnily enough. Had a bit of a rocky start due to Asian crisis: Discrete performance in THB terms: 2001:+26% ; 2002 +48%, 2003:+100%; 2004:-4%, 2005: +27%, 2006:+13%. BTW Aberdeens own "historic prices" on their own website only go back to around 2005, as previously was NakSchr.

http://www.aberdeen-asset.co.th/pdfupload....pdf?OpenElement

http://www.aberdeen-asset.co.th/aam.nsf/th...etandprospectus

The fund has significantly outperformed the SET over most periods, eg over 3 yrs to 29 June SET +21%; AG:+70%

Irene's point is interesting. In developed markets Index tracker funds often do better on average than the fund managers who actively pick funds. Charges being one factor. In Thailand I think this applies less. My view is that because there is a much smaller selection of stocks in Thailand compared to the UK, it's easier to weed out the underperformers. So a decent fund management house such as Aberdeen should be able to outperform. check out how many stocks on the UK exchange vs on Thai. Then see how many are decent. Also if you look at UK. The middle tier FTSE250 outperforms the top FTS100 or FT30 (top 100 and top 30) over long periods. While bigger companies are often safer, it is much more difficult to grow. Hence my view is someone like Aberdeen Growth should exceed the index over reasonable periods.

If you're in Thailand and work here. Their Long Term Equity Fund is worth considering. Performance is similar- slightly better recently than growth. But you can actually get a reduction in your income tax. Ing's website used to explain it quite well. Basically you can reduce your income tax in this year, in return you need to hold for 5 years. I thought it was well worth while. I timed it towards end of year, so ended up paying no tax in December for Xmas. You need to get a cert etc.

Recommendations? I wouldn't recommend to you or anyone else I don't know. It would be very unprofessional, plus what gives me the right anyway? What is right for me isn't necessarily same for you. But I would say:

The Aberdeen ones I mentioned earlier I only acquired in 2007 so haven't had much time to see yet

Aberdeen Growth. I hold it. Will continue to do so.

Aberdeen LTEF. I hold it. But unfortunately I'm outside Thailand now and not earning there so can't take advantage to buy any more. That will change soon, and I'm looking forward to getting some tax benefit form Thai Gov for all the stuff I put in. Might choose Ing LTEF this time though

You can seee the Thai only funds can be very volatile. You can lose money. If you bought aound Feb98 you could lose about 30-40% before end of year, That was the worst one I remember. In 2000's only 2003 made a loss -4%. It's made money over virtually any 5 yr period since start though, even worst years.

The other fund managers are mainly Thai companies. I have less faith in them. Ing being an exception - Dutch, and UOB Singaporean. Basically the Thai players are newer to the game. Also feels safer with an international name. Aberdeen couldn't afford a fraud in a small market, it would affect their worldwide business....They'd sort out if something went wrong legally...

Hope the above is useful. Again it is in no way a recommendation to anyone.

Edited July 18, 2007 by ThaiWanderer68

[samran]

I've got an ING good corporate governance fund. It has gone up 24% over the past year. It could tank tomorrow though, but I bought it as a tax minimisation tool.

Having said that, apart from two other Thai shares, it is the only direct exposure to the SET I have.

[trajan]

thanks ThaiWanderer and Samran!

the income tax reduction benefit sounds VERY attractive...can you reduce your gross income in the current year by the amount you invest in LTEF (provided that you hold for 5 years)? If so, that alone would be fantastic!! (assuming the underlying fund doesnt tank in the longer run)

[samran]

thanks ThaiWanderer and Samran!

the income tax reduction benefit sounds VERY attractive...can you reduce your gross income in the current year by the amount you invest in LTEF (provided that you hold for 5 years)? If so, that alone would be fantastic!! (assuming the underlying fund doesnt tank in the longer run)

thats right, though the reality is that you only have to hold it for little more than three years if you invest at the right time. The 5 years refers 5 calendar years.

So for instance, if you invest on the 31st of Dec 07, the next day (1st of Jan 08) you'll have already held it for 2 years.

1st Jan 09 = 3 years

1st Jan 10 = 4 years

1st Jan 11 = 5 years and you can divest on his date, which in real time, is only 3 years.

You can also cash out before, but what you saved in Tax you'll have to repay.

[Irene]

If you're in Thailand and work here. Their Long Term Equity Fund is worth considering. Performance is similar- slightly better recently than growth. But you can actually get a reduction in your income tax. Ing's website used to explain it quite well. Basically you can reduce your income tax in this year, in return you need to hold for 5 years. I thought it was well worth while. I timed it towards end of year, so ended up paying no tax in December for Xmas. You need to get a cert etc.

Recommendations? I wouldn't recommend to you or anyone else I don't know. It would be very unprofessional, plus what gives me the right anyway? What is right for me isn't necessarily same for you. But I would say:

The Aberdeen ones I mentioned earlier I only acquired in 2007 so haven't had much time to see yet

Aberdeen Growth. I hold it. Will continue to do so.

Aberdeen LTEF. I hold it. But unfortunately I'm outside Thailand now and not earning there so can't take advantage to buy any more. That will change soon, and I'm looking forward to getting some tax benefit form Thai Gov for all the stuff I put in. Might choose Ing LTEF this time though

You can seee the Thai only funds can be very volatile. You can lose money. If you bought aound Feb98 you could lose about 30-40% before end of year, That was the worst one I remember. In 2000's only 2003 made a loss -4%. It's made money over virtually any 5 yr period since start though, even worst years.

The other fund managers are mainly Thai companies. I have less faith in them. Ing being an exception - Dutch, and UOB Singaporean. Basically the Thai players are newer to the game. Also feels safer with an international name. Aberdeen couldn't afford a fraud in a small market, it would affect their worldwide business....They'd sort out if something went wrong legally...

Hope the above is useful. Again it is in no way a recommendation to anyone.

Just to share with others on three points:

First, I went with Aberdeen in late 2005 on Asian Fund and later on European fund and Small Cap Fund, and now are quite pleased with the outcome. Again, timing is important not only an efficient asset-management company.

Second, except index fund, LTF and RMF fund, other funds tend to fare badly when compared with the average. Why? Unitholders of other funds are so sensitive to volatility of the market and will sell and buy units when the market is low and high. They sell when the market is down because of certain bad news and buy when the market is up. This is not the fault of the Thai asset management companies but because of the rules allowing unitholders to sell whenever they like. Unlike other countries, unitholders are restricted to exercise their rights of disposal at an interval thereby allowing cooling time. You will always see the net buy/sell of Local Institutions buying a lot when market is up and selling when it is down. What sort of future they would have in the stock market? I realised this in mid-2003 when there was a run on one equity fund. Since that day, I only go for LTF and RMF which penalise you if you liquidate within five years. Unitholders are small holders who are most sensitive to rumours, news of any sort that reflect on the behaviour of most funds they hold.

I intend to watch ETF's performance the first month. When it has reached its working as intended, I will, on a fixed date of each month,buy a fixed sum not caring of the price they command in the market. This is called dollar averaging. One American lady did that since her working days in buying GE monthly. When she passed away at the age of 80's, to the pleasant surprise of her offsprings, her fund surpassed S & P 500 by thousand folds. This was due to compounding effects of the investment. In a way she was lucky since she picked one and only right company. The story would be otherwise if she picked a company like Enron. In the case of the coming Thailand's ETF, there is the diversity because the fund will represents 50 top companies in Thailand. The top 5 covers half the value of the fund.

(Can someone pinpoint for me the source of information of this lady? I recall this story from reading one of the many investment books that I read but cannot remember which one.)

[ArranP]

First State China

MLIIF World Mining

[ThaiWanderer68]

Irene

Graph at following link shows Aberdeen Growth vs SET index. AG has consistently outperformed over 1 year periods. Slightly under in last 3-6 months, but year's not finished yet. Picture will have changed a little tho' as set is now thru 800+, and AG climbed further. Often the exception rather than the rule as you say. But AG is consistently doing it.

http://www.aberdeen-asset.com/pdfupload.ns...pdf?OpenElement

BTW agree on currency averaging. I prefer to call it Thai Baht averaging or pound cost averaging tho. Dollars are for people who'll be driving tuk tuks

Edited July 19, 2007 by ThaiWanderer68

[trajan]

Unitholders of other funds are so sensitive to volatility of the market and will sell and buy units when the market is low and high. They sell when the market is down because of certain bad news and buy when the market is up. This is not the fault of the Thai asset management companies but because of the rules allowing unitholders to sell whenever they like. Unlike other countries, unitholders are restricted to exercise their rights of disposal at an interval thereby allowing cooling time. You will always see the net buy/sell of Local Institutions buying a lot when market is up and selling when it is down. What sort of future they would have in the stock market? I realised this in mid-2003 when there was a run on one equity fund. Since that day, I only go for LTF and RMF which penalise you if you liquidate within five years. Unitholders are small holders who are most sensitive to rumours, news of any sort that reflect on the behaviour of most funds they hold.

that is very interesting...I will keep that in mind Irene! I didnt know unitholders could buy and sell at will (no cooling time)...

just a few technical questions if you know:

a. I checked a few websites and it seems (but Im not sure) that you can invest B300K in each of an LTF AND RMF and then deduct same from income, BUT if you already participate in a Provident Fund plan, you cannot deduct for an investment in an RMF (but you can still deduct with an LTF)....do you know if that is correct?

b. after you invest 300K in an LTF and RMF can you still additionally buy monthly at a set time (for the Baht averaging effect) will the mutual fund company segregate your original B300K under an issued verifying certificate (for purposes of maintaining the income deduction benefit?)....

c. lastly, I understand that for an individual, all dividends paid out by a mutual fund are just taxed at 10% (withheld by the fund) and that other events (like internal trading of the fund) are not taxed......

thanks alot!!

[cmsally]

I'm another one looking at the Aberdeen Funds, so any info you have would be interesting. Would now be a bad time to buy or is growth fairly consistent. If the SET took a plunge would they closely follow?