Investment

[Mickey Cohen]

Has anyone ever invested with aberdeen in thailand?

Cheers,

[topt]

Fletchsmile mentions them in several topics as do a coouple of others.

You could do a search or, as a suggestion, make it easier for people to respond by making your question a bit more specific - as in what do you want to know about investing in Aberdeen in Thailand.

[Mickey Cohen]

Actually I want to make my money profitable. A rich thai lawyer told me I should invest and he adviced me aberdeen.

I really dont know much about stocks and they offer many diffrent investments.

So questions, can I make money by investing at first small amount? Is it risky?

Cheers,

[huanga]

If you are on the net seeking investment advice or confirmation...... you are better off park your money somewhere else that you know exactly what the return is or the risk-reward payout (fool and money are soon to part....) my only advice to you is to do your own due diligence and not to trust other people....

Edited February 25, 2013 by huanga

[manarak]

If you are on the net seeking investment advice or confirmation...... you are better off park your money somewhere else that you know exactly what the return is or the risk-reward payout (fool and money are soon to part....) my only advice to you is to do your own due diligence and not to trust other people....

good advice, and remember that people who are really good with investments don't need to offer or advertise their services.

[Khun Jean]

Actually I want to make my money profitable.

Don't we all.

A rich thai lawyer told me I should invest and he adviced me aberdeen.

You might ask yourself how he got rich. Probably little to do with investing. I think it has more to do with advising.

I really dont know much about stocks and they offer many diffrent investments.

So questions, can I make money by investing at first small amount? Is it risky?

The one who has a guarantee to make money is the investment agent/broker and they are the ones that do that without risk.

You however will have to take the risk and hope you get a good return. The risk is unknown because the decision making is done by the agent/broker.

If you have to ask 'Is it risky?', i would suggest buying a beer bar in Pattaya is an easier way to invest. The risks are much more recognizable..

Cheers,

That would be a good name!

[Mickey Cohen]

Actually I want to make my money profitable.

Don't we all.

A rich thai lawyer told me I should invest and he adviced me aberdeen.

You might ask yourself how he got rich. Probably little to do with investing. I think it has more to do with advising.

I really dont know much about stocks and they offer many diffrent investments.

So questions, can I make money by investing at first small amount? Is it risky?

The one who has a guarantee to make money is the investment agent/broker and they are the ones that do that without risk.

You however will have to take the risk and hope you get a good return. The risk is unknown because the decision making is done by the agent/broker.

If you have to ask 'Is it risky?', i would suggest buying a beer bar in Pattaya is an easier way to invest. The risks are much more recognizable..

Cheers,

That would be a good name!

En France it wouldnt be.

I wasnt clear enough, its not to make big money, its instead of keeping money sleeping in a bank.

The lawyer is my customer who is from a rich fam of course

Edited February 25, 2013 by Mickey Cohen

[fletchsmile]

As mentioned above, I've been investing with Aberdeen since late 1990's. They are my preferred fund management house in Thailand.

As topt says if you do a search on Thai visa of "fletchsmile + aberdeen growth" it comes up a lot. Or click on/ cut and paste the following for links

http://www.thaivisa.com/content/gsearch.html?cx=partner-pub-8062882927723374%3A743sve-i02s&cof=FORID%3A11&ie=ISO-8859-1&q=fletchsmile+aberdeen+growth&sa=Search

You can start with as low as THB 5,000 on many of their funds. Aberdeen growth has been my favourite, and is now my largest investment. It has returned an average of 20% per year for me. Be careful with averages though, worst year was down 40%, best year more than doubled.

So yes you can make good money, and on small amounts. Yes it is risky. On the other hand that depends on how you define risk and your objectives. If you look on a 5year+ time frame though you're less worried about the day to day volatility.

Fletch

[Mickey Cohen]

Thanks a lot for this answer!

[cheeryble]

As mentioned above, I've been investing with Aberdeen since late 1990's. They are my preferred fund management house in Thailand.

As topt says if you do a search on Thai visa of "fletchsmile + aberdeen growth" it comes up a lot. Or click on/ cut and paste the following for links

http://www.thaivisa.com/content/gsearch.html?cx=partner-pub-8062882927723374%3A743sve-i02s&cof=FORID%3A11&ie=ISO-8859-1&q=fletchsmile+aberdeen+growth&sa=Search

You can start with as low as THB 5,000 on many of their funds. Aberdeen growth has been my favourite, and is now my largest investment. It has returned an average of 20% per year for me. Be careful with averages though, worst year was down 40%, best year more than doubled.

So yes you can make good money, and on small amounts. Yes it is risky. On the other hand that depends on how you define risk and your objectives. If you look on a 5year+ time frame though you're less worried about the day to day volatility.

Fletch

Congratulations on a return like that Fletch!

As a financial pickyperson though, may I ask what your n is? ie how many years is your sample? And is it a valid sample from which to extrapolate the future. And how would the investment have compared had you bought index trackers at a much cheaper entry with no escape fees?

One more little question.

Isn't Aberdeen front-end loaded?

But once again......congrats, you did well.

Edited February 25, 2013 by cheeryble

[Mickey Cohen]

So cheeeyble wasnt so lucky right?

[fletchsmile]

Cheeryble

Makes
sense to be picky about where you put your money.

The number of years is around 14 or 15, as I first invested in the late 1990's in the fund - after the crash.

Is it a valid sample is a good question. I don't think the 1990's is a good basis for looking foward. Thailand is a much different place now than then.
Performance in the 2000's would be more meaningful. It captures some tough years as well as good years and probably a reasonale sample.

Extrapolating past data to future is always dangerous. My own expectations/ views:, I wouldn't budget on 20% per annum going forward nor expect it to happen. An average of 10% going forward is not unreasonable though.

Usually when I compare to trackers over a longer period the fund beats them, although over shorter time frames there are obviously ups and downs. I've posted a few times before why the question of tracker vs active manager may yield a different result than in the west. This includes reasons such as if you took the top 100 US or UK companies the average quality is better than taking the top 100 Thai companies. Thailand doesn't have the same depth and numbers of companies. Simply put another way it's easier to spot the dogs in Thailand for active managers.

Generally it's more common for unit trusts and mutual funds to levy front-end fees in Thailand. It does vary though, and Aberdeen are a good example. 3 diff funds and 3 diff structures so best to check the fact sheets

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABG

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABGEM

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABLTF

Generally you're looking at:

1 - 1.5% as a total to get in and out (combined). eg Ab Growth 0% up front, 1% back-end, Emerging Growth 1.5% initial no back-end

Annual charges of around 1.75% (management + trustee + other)

Now if you buy similar based Aberdeen funds in Singapore, the initial fees are much higher.

If you buy in the UK, similar funds have higher initial fees but you can get discounted to zero thru people like Hargreaves Lansdown.

Annual fees will be the same

My view is that 1-1.5% total to get in/out is reasonable, particularly as you'd generally be looking at a few years.

1.75% p.a should be seen in context of the returns.

[cheeryble]

So cheeeyble wasnt so lucky right?

I got out of the markets 100% just weeks before start of the 08 crash (though I was already unconfident and under 100% in ).

I thought I was gonna die of cancer in 2010 and got away with it completely.

I have a devoted wife half my age, and have two arms and two legs and great friends the world over.

I'm the luckiest man alive

[fletchsmile]

So cheeeyble wasnt so lucky right?

Many people talk of a lost decade for equities in the 2000's, with equities "going nowhere". For emerging markets and places like Thailand it was a very different story.

Another reason for building THB assets if you live in Thailand. Not so much get rich quick, as protect yourself a bit from the currency rates, inflation, and problems of the west

[cheeryble]

Cheeryble

Makes

sense to be picky about where you put your money.

The number of years is around 14 or 15, as I first invested in the late 1990's in the fund - after the crash.

Is it a valid sample is a good question. I don't think the 1990's is a good basis for looking foward. Thailand is a much different place now than then.

Performance in the 2000's would be more meaningful. It captures some tough years as well as good years and probably a reasonale sample.

Extrapolating past data to future is always dangerous. My own expectations/ views:, I wouldn't budget on 20% per annum going forward nor expect it to happen. An average of 10% going forward is not unreasonable though.

Usually when I compare to trackers over a longer period the fund beats them, although over shorter time frames there are obviously ups and downs. I've posted a few times before why the question of tracker vs active manager may yield a different result than in the west. This includes reasons such as if you took the top 100 US or UK companies the average quality is better than taking the top 100 Thai companies. Thailand doesn't have the same depth and numbers of companies. Simply put another way it's easier to spot the dogs in Thailand for active managers.

Generally it's more common for unit trusts and mutual funds to levy front-end fees in Thailand. It does vary though, and Aberdeen are a good example. 3 diff funds and 3 diff structures so best to check the fact sheets

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABG

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABGEM

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABLTF

Generally you're looking at:

1 - 1.5% as a total to get in and out (combined). eg Ab Growth 0% up front, 1% back-end, Emerging Growth 1.5% initial no back-end

Annual charges of around 1.75% (management + trustee + other)

Now if you buy similar based Aberdeen funds in Singapore, the initial fees are much higher.

If you buy in the UK, similar funds have higher initial fees but you can get discounted to zero thru people like Hargreaves Lansdown.

Annual fees will be the same

My view is that 1-1.5% total to get in/out is reasonable, particularly as you'd generally be looking at a few years.

1.75% p.a should be seen in context of the returns.

Fair enough Fletch, you obviously know what you're doing.

I do see one advantage to a fund like that too.......that is you just stick your money in and trust. Saves all the agonising about moving bucks around.

[Mickey Cohen]

Thanks for the input, both of you.

Im much younger than you guys and have lets say 0 knowledge of this kind of business.

I dont know how to choose the right fund in aberdeen.

I want to start small lets say trying with 100k bahts.

I suppose I have to totally trust the broker if I dont want to get involved in any operations

[SOTIRIOS]

If 10% - 20% historic returns for the past 3 years interests you, P.M. me.

Minimum amount is $50,000 U.S.D.

Account remains in your control....not locked into any P.P.P. or the like

Overseen by Australian Regulatory Boards

[cheeryble]

.

Edited March 7, 2013 by cheeryble

[cocopops]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Here's a hypothetical - what will you do if your dipping-my-toe-in-the-water investment drops by 30%? Or gains 50%? And why?

[JSixpack]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Few advisors advocate investing in single index fund. Certainly Aberdeen Growth has beaten the pants off the SET Index long term and short term.

I can see a good case for lazy long term investing in a selection of index funds, a la the Coffeehouse portfolio. Thailand doesn't have such a variety of index funds however.

[manarak]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Few advisors advocate investing in single index fund. Certainly Aberdeen Growth has beaten the pants off the SET Index long term and short term.

I can see a good case for lazy long term investing in a selection of index funds, a la the Coffeehouse portfolio. Thailand doesn't have such a variety of index funds however.

I get the intention behind "optimised index funds", i.e. funds which try to outperform indexes by choosing the 13 to 15 best performing components of an index (according to Markowitz' portfolio theory, 13 random components of an index will replicate 98% of the index performance).

But I don't understand the benefit of diversifying investment into several index-replication funds (assuming the fund is a non-leveraged cash fund).

Also, one has to be sure the funds replicates an index that integrates dividend performance.

Edited March 7, 2013 by manarak

[fletchsmile]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Here's a hypothetical - what will you do if your dipping-my-toe-in-the-water investment drops by 30%? Or gains 50%? And why?

If developed markets index funds have a point to some extent. If comparing to active managed funds like Aberdeen Thailand's the 2 biggest crticisms I have are:

1) They assume you just throw a dart and pick any old fund. Basic research can up your odds significantly

2) Their research is often skewed to developed markets analysis not geared to Thailand. As JSixPack points out certain funds consistently outperform SET (not every single calendar year but most, and almost any 5 cumulative 5 year period), Aberdeen that OP asked about being one.

Fletch

Edited March 7, 2013 by fletchsmile

[PCA]

If 10% - 20% historic returns for the past 3 years interests you, P.M. me.

Minimum amount is $50,000 U.S.D.

Account remains in your control....not locked into any P.P.P. or the like

Overseen by Australian Regulatory Boards

LOL

[fletchsmile]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

If you're young and investing for a longer term you can often afford to take higher risks, which means equities unit trusts might be suitable. Assuming you've also set aside a few months money for emergencies first. A reasonable starting strategy for someone like yourself may be pick a few funds, spread your money over a few of them, and invest regularly for baht cost averaging.

As you asked about Aberdeen initially I'd comment most of their range is OK., and a selection would be OK. We hold many of them

Read thru their fact sheets to understand the objectives. Past performance is no guarantee of the future, but useful to look at is how it has performed vs its benchmark and how it has performed vs its peers in the sector sector, particularly in "discrete" calendar years, 2012, 2011, 2010 etc. Anyone can have a good or bad patch which can temporarily make cumulative performance good or bad, but if some is consistently bad every year its reasonable to avoid it unless you're aware of a dramatic change in something

The main one I dislike from Aberdeen is Aberdeen American Growth Fund

http://www.aberdeen-asset.co.th/doc.nsf/Lit/FactsheetThailandOpenABAG

Not only is it bottom (4th) quartile cumulatively since launch and 3rd quartile over periods of 5 year, which is a longer term measurement. More worryingly in each and every one of the years from 2009-2012 and year to date it has never had a performance above average, always being 3rd or 4th quarter.

Plus In only one year 2009 did it marginally beat the benchmark. In all the other years it did worse.

So it has a record of consistent underperformance vs its peers and benchmark. Unless you know a good reason why you think this will change move on and look at something else. If you want an American fund pick another fund manager

This is a good example that:

1) even the good fund management houses have some poor funds

2) this re-inforces to me one of the flaws of saying index funds or ETFs do better than the "average" managed fund. Of course it's included when calculating averages, there's a very good chance this will continue to be below average, so I'd never pick it.

Hargreaves Lansdown does some good free guides worth a read to start building your knowledge. Be proactive and educate yourself, and there's a good chance that over time you yourself can grow into the best person to manage your own money.

http://www.hl.co.uk/news/free-investment-and-pension-guides#g1

Edited March 7, 2013 by fletchsmile

[cocopops]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Here's a hypothetical - what will you do if your dipping-my-toe-in-the-water investment drops by 30%? Or gains 50%? And why?

If developed markets index funds have a point to some extent. If comparing to active managed funds like Aberdeen Thailand's the 2 biggest crticisms I have are:

1) They assume you just throw a dart and pick any old fund. Basic research can up your odds significantly

2) Their research is often skewed to developed markets analysis not geared to Thailand. As JSixPack points out certain funds consistently outperform SET (not every single calendar year but most, and almost any 5 cumulative 5 year period), Aberdeen that OP asked about being one.

Fletch

The second point is correct. I'm also beginning to suspect that there may be a role for active management in developing markets. On the other hand, there really isn't much data about. Not a lot of non-overlapping 5 year periods to compare for most of these markets.

If I understand it correctly I think the authors I named would take issue with your first point though. They go to enormous lengths to demonstrate that there is no correlation between past and future out-performance within retail mutual funds, and less than one might naturally expect in terms of past and future relative volatility.

[fletchsmile]

Thanks for the input, both of you. Im much younger than you guys and have lets say 0 knowledge of this kind of business. I dont know how to choose the right fund in aberdeen. I want to start small lets say trying with 100k bahts. I suppose I have to totally trust the broker if I dont want to get involved in any operations

I think when you start investing it is at least worth understanding the case for indexing. You may decide that it's all bullshit and that market-timing and stock-picking (or hiring someone to do those for you) are the way to go. But the indexing crowd (William Bernstein and John Bogle are two reputable authors) manage to make a fairly persuasive case that those things only cost you money in the long term. Their studies are all based on US data of course, but they do represent the state-of-the-art academic opinion. Something worth knowing about.

Here's a hypothetical - what will you do if your dipping-my-toe-in-the-water investment drops by 30%? Or gains 50%? And why?

If developed markets index funds have a point to some extent. If comparing to active managed funds like Aberdeen Thailand's the 2 biggest crticisms I have are:

1) They assume you just throw a dart and pick any old fund. Basic research can up your odds significantly

2) Their research is often skewed to developed markets analysis not geared to Thailand. As JSixPack points out certain funds consistently outperform SET (not every single calendar year but most, and almost any 5 cumulative 5 year period), Aberdeen that OP asked about being one.

Fletch

The second point is correct. I'm also beginning to suspect that there may be a role for active management in developing markets. On the other hand, there really isn't much data about. Not a lot of non-overlapping 5 year periods to compare for most of these markets.

If I understand it correctly I think the authors I named would take issue with your first point though. They go to enormous lengths to demonstrate that there is no correlation between past and future out-performance within retail mutual funds, and less than one might naturally expect in terms of past and future relative volatility.

It's a good point to raise on past performance data. When they're looking at performance data, for a US market fund performance in a developed market again I think there's a difference. A few key points in Thailand to consider:

> There are less active fund management houses - so less competition among themselves, and imbalances in resources

> The market is less developed, so things like other market particpants eg retail investors are less sophisticated. Even newer fund managemnt houses which are Thai would not necessarily have the decades of experience global participants could bring

> There is less depth in the quality of companies in the index - easier to spot the dogs. At the same time the more experience you have in spotting dogs the better

Two examples relevant to the thread:

Aberdeen Growth - a Thai equity fund and therefore emerging market - has consistently outperformed the benchmark and its peers in around 15 years I've been following and investing. I believe there are reasons for that. Interesting in the last 5 years or so I've noticed its peers catching up, as the market gradually matures and more particpants enter. To me there is a correlation, good quality managers from good fund management houses in narrow markets will beat poor quality managers from poor quality fund managers more often than they lose to them.

Aberdeen American Growth - as above is actually a feeder fund, into a developed market. A few points here. It's a feeder fund to a developed US fund.:

- Maybe this does add some support to the argument of tracker vs active in a developed market, as it regularly underperfoms the index/ market

- It has underperformed in most of the last 5 years vs its peers (like for like segments)

- Again I struggle to believe this is random and claims that there's no correlation between poor performance in 2008, 2009, 2010 and poor performance in 2011 and 2012

For me in emerging markets looking at performance vs index and peers in the same segments is a way to improve the odds, as performance isn't random. I would also combine it with forward looking and other research as well.

Fletch

[fletchsmile]

BTW Cocopops I think it's healthy to continually challenge ideas, as life continues to change, and we all make mistakes from time to time. The index/ tracker vs active one is an old debate, and one for me I'm mindful of, and hence consider now ith a Thailand twist.

--------------------------------------------------------------------------------------

Another thing I consider is the fund manager himself

Antony Bolton is a great example. I held his Fidelity Speciality Situations Unit trust for many years. Time after team it beat the market (though not every year). :

http://en.wikipedia.org/wiki/Anthony_Bolton

After he moved on from this fund, it hasn't done as well. When he moved I reduced my holdings in it. The fund was actually split into 2 funds: a UK fund I still hold some investment in with reduced holdings, the other a Global Fund I sold completely as after giving it a chance for a while it wasn't delivering as well as other comparable funds or past.

He moved on to other things including managing Fidelty China Special Situations Investment Trust. He hasn't done so well in this new area. I think there are various reasons for this, some touched on by wiki above. Another one is that investing in Asia can be different to investing in the west, and he has less experience in this field.

I would want him to prove himself with this fund before investing in it, given it hasn't done so well so far. On the other hand with the first fund he is famous for, he had proved himself so I invested and I enjoyed years of above average and above index performance

------------

[JSixpack]

But I don't understand the benefit of diversifying investment into several index-replication funds (assuming the fund is a non-leveraged cash fund).

The benefit of diversity is in assuring stability of growth and possibly outperformance over a longer term through non-correlation. The several funds would reflect different market sectors, domestically and globally. Look up the Coffeehouse portfolio or the Yale portfolio (mostly indexed funds) for examples.

[manarak]

But I don't understand the benefit of diversifying investment into several index-replication funds (assuming the fund is a non-leveraged cash fund).

The benefit of diversity is in assuring stability of growth and possibly outperformance over a longer term through non-correlation. The several funds would reflect different market sectors, domestically and globally. Look up the Coffeehouse portfolio or the Yale portfolio (mostly indexed funds) for examples.

doh! dumb me was assuming diversification into several funds all replicating the same index! LOL

[yoshiwara]

But I don't understand the benefit of diversifying investment into several index-replication funds (assuming the fund is a non-leveraged cash fund).

The benefit of diversity is in assuring stability of growth and possibly outperformance over a longer term through non-correlation. The several funds would reflect different market sectors, domestically and globally. Look up the Coffeehouse portfolio or the Yale portfolio (mostly indexed funds) for examples.

doh! dumb me was assuming diversification into several funds all replicating the same index! LOL

A diversified managed fund reduces the risk but is a boring life.