Advice please,,, SET?

[aussieinthailand]

Please forgive my trespass as not sure where to post this.

Having NO experience of investing in stock ex, so forgive please once again,

I have only invested in bricks n mortar back in OZ with great success, but this is a little different.

I've had a look at the last 10/15 years history of the SET and apart from the 2008 global issues it seems it could be something to take a good look at, as I do like the buy in the gloom and sell in the boom theory,

so can someone tell me if I invested 50,000 baht in the SET 15 years ago what would be the profit less taxes and charges, I'd use a financial adviser here but do know any here i'd have confidence in...

Cheers guy's

[wym]

I don't even know if there are instruments available for betting on the SET itself, but the historical data is I'm sure available online for you to figure this out for yourself.

50,000 baht is such a piddling amount, the normal overheads of investing in stocks + extra restrictions perhaps in place for visitors I would guess this isn't worthwhile, the friction/overhead involved would eat up all if not most of any (possible) profits.

Even half a million would be marginal for a newbie starting out.

Just apply your strategy to your back-home stock index and work with a trusted advisor there. Just because you enjoy Thailand doesn't mean you should invest money here.

[StreetCowboy]

If you want exposure to emerging markets, buy a unit trust, and get someone who knows what they are doing to do the investing.

Jardine Fleming does a Thailand specific fund. I am sure there are others.

SC

[wordchild]

in Jan 1999 the SET (then pretty much at the lows following the Asian Financial Crisis) was at a value 355 (give or take a bit) it now stands at 1277 up 3.5x or so. In Thai bt terms (not incl dividends) 50000bt invested would now be worth 175000bt. if you incl dividends the total return would have been much greater probably more like 5 or 6 x your 50000 investment ie 250000 to 300000bt. In dollar terms the return would have been even greater than that given the strength of the baht (again from a low point) over much of that period

The past is not always the best guide to the future however!

Edited January 15, 2014 by wordchild

[Prbkk]

in Jan 1999 the SET (then pretty much at the lows following the Asian Financial Crisis) was at a value 355 (give or take a bit) it now stands at 1277 up 3.5x or so. In Thai bt terms (not incl dividends) 50000bt invested would now be worth 175000bt. if you incl dividends the total return would have been much greater probably more like 5 or 6 x your 50000 investment ie 250000 to 300000bt.

The past is not always the best guide to the future however!

Going from memory only ( could be dodgy), I thought it had gone a bit lower during 1998....I thought under 300.

[wordchild]

in Jan 1999 the SET (then pretty much at the lows following the Asian Financial Crisis) was at a value 355 (give or take a bit) it now stands at 1277 up 3.5x or so. In Thai bt terms (not incl dividends) 50000bt invested would now be worth 175000bt. if you incl dividends the total return would have been much greater probably more like 5 or 6 x your 50000 investment ie 250000 to 300000bt.

The past is not always the best guide to the future however!

Going from memory only ( could be dodgy), I thought it had gone a bit lower during 1998....I thought under 300.

you are quite right; it got down to c253 during 1998, in my post i was responding to the OP,s specific question ie what has happened to the SET over the last 15 years ie since Jan 1999 (if my maths is correct). That is why i used the phrase"pretty much at the lows". In the context of what has happened since, it was. Edited January 15, 2014 by wordchild

[fletchsmile]

Worldchild's post is in the right ballpark if you had invested in the SET index. As he says the figures tho' exclude dividends, but his estimates look reasonable.

A decent actively managed unit trust/ mutual fund in my view should be able to beat that though. I don't have an exact 15 year number, but what I can tell you if you had invested in Aberdeen Growth since inception in July 1997 (about 16.5 years) your return would be about +880% compared to about 100% on the SET and 276% on a SET total return index basis (including divs). This of course includes the Asian Financial crisis of 1997 and the GFC of 2007, whereas 15 years omits the first

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

From Dec 2000 - just over 13 years (source my own monthly numbers) the return would have been about 1175%. this includes annual charges and is offer to bid. The SET in this time would have been up about 380% (excluding divs)

On an amount of 50k you'd probably be better off with a unit trust than individual shares if you're investing for 15 years from now. I'd also go with an active managed fund rather than an index tracker.

So there you have some ideas as to 13 year 15 year and 16.5 years performances as well as the variations in return. SET can be a volatile market, but well worth it.

Cheers

Fletch

[JSixpack]

Lump sum buy-and-hold investing--not recommended. If you must do that, then go for a managed fund as fletchsmile advised.

[Luang]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

[Kinnock]

Sorry - I thought this was a topic about the Thai word 'set' ...... as in "Phom set leow - khun kuan gab baan deoh nee".

I nothing about the stock market.

[JSixpack]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

You just don't have a clue. If you look at some of the Aberdeen, ING, or BBL funds (Bualuang Top Ten) they've had quite impressive success and beat the pants off indexed funds.

But we're talking about possibilities for lump sum buy-and-hold. If you know how to buy low and sell high, actively managing yourself, you can do well enough in indexed funds.

Edited January 18, 2014 by JSixpack

[Luang]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

You just don't have a clue. If you look at some of the Aberdeen, ING, or BBL funds (Bualuang Top Ten) they've had quite impressive success and beat the pants off indexed funds.

But we're talking about possibilities for lump sum buy-and-hold. If you know how to buy low and sell high, actively managing yourself, you can do well enough in indexed funds.

Agree, so why the insult tough guy??!

[StreetCowboy]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

You just don't have a clue. If you look at some of the Aberdeen, ING, or BBL funds (Bualuang Top Ten) they've had quite impressive success and beat the pants off indexed funds.

But we're talking about possibilities for lump sum buy-and-hold. If you know how to buy low and sell high, actively managing yourself, you can do well enough in indexed funds.

Agree, so why the insult tough guy??!

There's also plenty of managed funds that don't beat the indexes.

I invested in a great fund that went up in value ten times. By the time I got round to selling, it was back down amongst it's peers, or lower. If you want to make a full-time job out of playing with your money, then you might do well. Otherwise, I'd be happy with modest returns from an honest and respectable manager. Index funds are pretty low risk, especially if they achieve their objectives

SC

[StreetCowboy]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

You just don't have a clue. If you look at some of the Aberdeen, ING, or BBL funds (Bualuang Top Ten) they've had quite impressive success and beat the pants off indexed funds.

But we're talking about possibilities for lump sum buy-and-hold. If you know how to buy low and sell high, actively managing yourself, you can do well enough in indexed funds.

Agree, so why the insult tough guy??!

There's also plenty of managed funds that don't beat the indexes.

I invested in a great fund that went up in value ten times. By the time I got round to selling, it was back down amongst it's peers, or lower. If you want to make a full-time job out of playing with your money, then you might do well. Otherwise, I'd be happy with modest returns from an honest and respectable manager. Index funds are pretty low risk, especially if they achieve their objectives

SC

[Luang]

Don't take my word for it! I guess these folks don't have a clue either?

May 6 (Reuters) - Warren Buffett said on Sunday most investors are better off putting their money in low-cost index funds, though he believes he can still outperform major market indexes.

Full article here:

http://www.reuters.com/article/2007/05/07/berkshire-indexfunds-idUSN0628419820070507

Just a few more if you're not convinced:

http://www.latimes.com/business/la-fi-1006-main-funds-20131006,0,409152.story

http://www.businessinsider.com/index-funds-beat-actively-managed-funds-2013-6

https://personal.vanguard.com/pdf/s296.pdf

http://business.financialpost.com/2013/10/11/active-mutual-fund-managers-take-another-beating/

http://www.forbes.com/sites/greggfisher/2013/08/28/in-mutual-funds-is-active-vs-passive-the-right-question/

http://www.marketwatch.com/story/13-reasons-index-mutual-funds-and-etfs-rule-2013-07-24

[ExpatJ]

Now is a good time to invest in the set. I has dropped a lot recently. Spread your money around a few blue chip Thai companies - advanc. Kbank pttgc. I wouldn't use actively managed funds especially those based out of Asia you will pay too much in fees- use an etf based in Europe or USA that invests in Thai stocks ( and your fees will be 10 or more times less than a mutual fund.). Also as the senior Goldman Sachs director noted when he retired recently passive eft have outperformed actively

Managed mutual funds consistently since ETFs appeared.

Sent from my iPhone using ThaiVisa app

[ExpatJ]

Now is a good time to invest in the set. I has dropped a lot recently. Spread your money around a few blue chip Thai companies - advanc. Kbank pttgc. I wouldn't use actively managed funds especially those based out of Asia you will pay too much in fees- use an etf based in Europe or USA that invests in Thai stocks ( and your fees will be 10 or more times less than a mutual fund.). Also as the senior Goldman Sachs director noted when he retired recently passive eft have outperformed actively

Managed mutual funds consistently since ETFs appeared.

Sent from my iPhone using ThaiVisa app

And I know several people will now post saying that they has made 30-40-100% returns on their active managed funds in recent years- but the data is clear etf outperform mural funds. And if a fund has increased a lot in recent times you are probably too late so don't be too tempted !

Sent from my iPhone using ThaiVisa app

[JSixpack]

Why not go with a low-fee Index Fund? Managed funds are just creamed off by people who essentially chase the end of the rainbow -with about as much success!

You just don't have a clue. If you look at some of the Aberdeen, ING, or BBL funds (Bualuang Top Ten) they've had quite impressive success and beat the pants off indexed funds.

But we're talking about possibilities for lump sum buy-and-hold. If you know how to buy low and sell high, actively managing yourself, you can do well enough in indexed funds.

Agree, so why the insult tough guy??!

I wasn't being insulting, princess, just realistic. Sorry if your bouquet got wilted. Now, in a Western country you could go for a fairly reliable "lazy portfolio," but here in LOS we don't have a such a broad range of ETFs or index funds.

There's also plenty of managed funds that don't beat the indexes.

Uh . . . yeah. Figured that out. Now to choose one that regularly does.

Next objection: none of them beats the index every single year, every single month, every single day.

Way ahead o' you. OK, next.

Edited January 19, 2014 by JSixpack

[fletchsmile]

If you're talking developed, liquid, mature markets I think there's a strong case for the ETF/tracker vs active managed.

Indeed for the US market I struggle to find a good fund that regularly outperforms, more so than most other markets. I'd also recall Hargreaves Lansdown one of my discount brokers for a while not having a US fund in their Wealth 150 (top 150 funds) because they didn't see a fund that they could with conviction rate as consistently outperforming the US indices. Even now they only have a couple.

You will also notice that almost all of the research links above refer to US style markets. Not a single one refers to Thailand. I've yet to see anyone post decent research on the Thai market. On the other hand my own experience since 1997 is that it's not that difficult to pick Thai funds that regularly outperform the SET index.

The other massive flaw with the research is that it simply looks at averages after fees. Of course average active managed funds will perform lower because of higher fees, that's a no brainer. The problem I have with that particularly in Thailand is who in their right mind picks a fund at random or throws darts in a board? If that's your idea, yes choose a tracker. On the other hand if you're prepared to spend time researching among others: fund management house, Morning Star ratings, brokers like Hargreaves Lansdown views, cumulative performance vs benchmark and peers, discrete performance vs bench mark and peers, number of times it comes in 1st or 2nd quartile, fund manager, tenor of fund manager, etc etc you can significantly move the odds in your favour. Also I remember in the UK I would never buy a fund run by a UK retail bank, as you were almost always guaranteeing below average performance. The best fund managers pay highest salaries to attract the best managers. Banks couldn't. Anyone in the UK will remember for example managers like Anthony Bolton that consistently added alpha.

Warren Buffet as per one of the above articles might be right that most people would be better of with a tracker. But a key point is he himself believes he can outperform, as I believe can people who do their homework, and understand what they are doing. I'd classify myself in the latter. But I fully understand for many people yes they might be better off with a passive tracker/ ETF.

Another example I like Aberdeen Thailand as a fund manager. I like their Thailand Growth fund. I wouldn't touch their American fund though. Understand your markets and your funds. Be careful though as active funds can also become victims of their own success, and become much larger which in turn makes it more difficult outperform, which is yet another factor. There are signs sometimes ABG may be getting to that stage (not there yet in my view) as its outperformance is less than it used to be

So yes I'd rather take 880% in Aberdeen Growth after a little higher fees than 276% in a SET tracker. JSixpack gives some other good Thai funds - it's also no coincidence these are Morning Star 4 or 5 rated and top the performance tables. But you index guys aiming for average performance and low fees go ahead and take the latter

Cheers

Fletch

Edited January 19, 2014 by fletchsmile

[fletchsmile]

The way Hargreaves Lansdown pick out their Wealth150 top funds gives an idea of how they and you can approach the subject of identifying active managers that add value.

I use their list as one of my factors. For my mum's portfolio I manage for her, I also have a rule that any fund I invest in for her, I must either hold that fund myself or it must be on the HL W150 list (often both)

Link to free download

https://www.hl.co.uk/free-guides/wealth-150

Cheers

Fletch

[meand]

If you're talking developed, liquid, mature markets I think there's a strong case for the ETF/tracker vs active managed.

Indeed for the US market I struggle to find a good fund that regularly outperforms, more so than most other markets. I'd also recall Hargreaves Lansdown one of my discount brokers for a while not having a US fund in their Wealth 150 (top 150 funds) because they didn't see a fund that they could with conviction rate as consistently outperforming the US indices. Even now they only have a couple.

You will also notice that almost all of the research links above refer to US style markets. Not a single one refers to Thailand. I've yet to see anyone post decent research on the Thai market. On the other hand my own experience since 1997 is that it's not that difficult to pick Thai funds that regularly outperform the SET index.

The other massive flaw with the research is that it simply looks at averages after fees. Of course average active managed funds will perform lower because of higher fees, that's a no brainer. The problem I have with that particularly in Thailand is who in their right mind picks a fund at random or throws darts in a board? If that's your idea, yes choose a tracker. On the other hand if you're prepared to spend time researching among others: fund management house, Morning Star ratings, brokers like Hargreaves Lansdown views, cumulative performance vs benchmark and peers, discrete performance vs bench mark and peers, number of times it comes in 1st or 2nd quartile, fund manager, tenor of fund manager, etc etc you can significantly move the odds in your favour. Also I remember in the UK I would never buy a fund run by a UK retail bank, as you were almost always guaranteeing below average performance. The best fund managers pay highest salaries to attract the best managers. Banks couldn't. Anyone in the UK will remember for example managers like Anthony Bolton that consistently added alpha.

Warren Buffet as per one of the above articles might be right that most people would be better of with a tracker. But a key point is he himself believes he can outperform, as I believe can people who do their homework, and understand what they are doing. I'd classify myself in the latter. But I fully understand for many people yes they might be better off with a passive tracker/ ETF.

Another example I like Aberdeen Thailand as a fund manager. I like their Thailand Growth fund. I wouldn't touch their American fund though. Understand your markets and your funds. Be careful though as active funds can also become victims of their own success, and become much larger which in turn makes it more difficult outperform, which is yet another factor. There are signs sometimes ABG may be getting to that stage (not there yet in my view) as its outperformance is less than it used to be

So yes I'd rather take 880% in Aberdeen Growth after a little higher fees than 276% in a SET tracker. JSixpack gives some other good Thai funds - it's also no coincidence these are Morning Star 4 or 5 rated and top the performance tables. But you index guys aiming for average performance and low fees go ahead and take the latter

Cheers

Fletch

Fletch,

Can you expand on what you said in bold above. I am not sure I understand why that is. A guess would be that as a fund gets too big, the managers have a harder time controlling the percentages of their preferred stocks in the fund?

[Time Traveller]

For the last 15 years and with dividends reinvested, I would say it easily would have returned over 10 times your money invested (above 1100%). That's without any particular skill at all. But without knowing your own tax situation - Thailand does not impose capital gains tax for individual stock investors - it could be less when factoring net of tax

[AyG]

Looking at available funds investing solely in Thailand the Fidelity fund has outperformed the SET in each of the last three years by a significant margin (+4.7%, +7.5%, +7.9%). (Only 3 years' history available.)

Allianz has also done pretty well (5 years history: +12.9, +13.3, -0.3, +12.6, +9.0).

Amundi pretty much hugs the index (-1.8, +6.3, +2.1, +0.2, +4.6).

Templeton's fund has underperformed the index more often than not (+0.0, -10.6, -2.9, +2.4, -1.5).

(Source: Morningstar)

There does appear to be a strong case for active management in the Thai market - though it's important to choose the right fund manager.

[fletchsmile]

If you're talking developed, liquid, mature markets I think there's a strong case for the ETF/tracker vs active managed.

Indeed for the US market I struggle to find a good fund that regularly outperforms, more so than most other markets. I'd also recall Hargreaves Lansdown one of my discount brokers for a while not having a US fund in their Wealth 150 (top 150 funds) because they didn't see a fund that they could with conviction rate as consistently outperforming the US indices. Even now they only have a couple.

You will also notice that almost all of the research links above refer to US style markets. Not a single one refers to Thailand. I've yet to see anyone post decent research on the Thai market. On the other hand my own experience since 1997 is that it's not that difficult to pick Thai funds that regularly outperform the SET index.

The other massive flaw with the research is that it simply looks at averages after fees. Of course average active managed funds will perform lower because of higher fees, that's a no brainer. The problem I have with that particularly in Thailand is who in their right mind picks a fund at random or throws darts in a board? If that's your idea, yes choose a tracker. On the other hand if you're prepared to spend time researching among others: fund management house, Morning Star ratings, brokers like Hargreaves Lansdown views, cumulative performance vs benchmark and peers, discrete performance vs bench mark and peers, number of times it comes in 1st or 2nd quartile, fund manager, tenor of fund manager, etc etc you can significantly move the odds in your favour. Also I remember in the UK I would never buy a fund run by a UK retail bank, as you were almost always guaranteeing below average performance. The best fund managers pay highest salaries to attract the best managers. Banks couldn't. Anyone in the UK will remember for example managers like Anthony Bolton that consistently added alpha.

Warren Buffet as per one of the above articles might be right that most people would be better of with a tracker. But a key point is he himself believes he can outperform, as I believe can people who do their homework, and understand what they are doing. I'd classify myself in the latter. But I fully understand for many people yes they might be better off with a passive tracker/ ETF.

Another example I like Aberdeen Thailand as a fund manager. I like their Thailand Growth fund. I wouldn't touch their American fund though. Understand your markets and your funds. Be careful though as active funds can also become victims of their own success, and become much larger which in turn makes it more difficult outperform, which is yet another factor. There are signs sometimes ABG may be getting to that stage (not there yet in my view) as its outperformance is less than it used to be

So yes I'd rather take 880% in Aberdeen Growth after a little higher fees than 276% in a SET tracker. JSixpack gives some other good Thai funds - it's also no coincidence these are Morning Star 4 or 5 rated and top the performance tables. But you index guys aiming for average performance and low fees go ahead and take the latter

Cheers

Fletch

Fletch,

Can you expand on what you said in bold above. I am not sure I understand why that is. A guess would be that as a fund gets too big, the managers have a harder time controlling the percentages of their preferred stocks in the fund?

Yes that's one of the factors. Assuming they are open-ended funds. Too large a fund and a fund manager may have to buy investments they don't necessarily want to buy, and lose focus as they've already made allocations to their preferred investments, or end up retaining mediocre ones as they've nothing much to sell into unless they hold cash. Can be particularly difficult for funds that have a small cap focus or want to have a concentrated nimble portfolio. Another variation is that a very popular fund attracts money after successful performance this may attract inflows after the event where timing may not be good. Some of the better fund management houses will soft close their funds sometimes.

Another variation a few years back related to a particular stock PTT and its group - not quite the same but worth considering. Many unit trusts in Thailand had a 10% limit on any one stock/group. Because the individual stock/group performed so well funds like Aberdeen were more or less maxed out with their weighting, and couldn't increase. Others such as ING had a higher limit per stock, so could ride the increases further. PTT was a large part of the index (15%+ if I recall) and while outperforming the SET average those with limits couldn't take a full weighting.

On the other hand once PTT had had a major rise, and looked overvalued and grown as a % of the index fund, a tracker fund was stuck holding a stock that was overvalued but a massive part of the index.

Cheers

Fletch

Cheers

Fletch

[meand]

Thanks!

And I take it the signs the fund is getting too big you refer to are simply the fund, (duh) getting too big, but also performing relatively poorly??

That is very interesting what you mentioned about the managers "soft closing" the funds. If you have shares of a particular fund, how do you even go about finding out if they soft closed? Forgive all the newbie question, thanks for your patience.

Edited January 22, 2014 by meand

[AyG]

That is very interesting what you mentioned about the managers "soft closing" the funds. If you have shares of a particular fund, how do you even go about finding out if they soft closed? Forgive all the newbie question, thanks for your patience.

With a soft closed fund it is still technically possible to buy it, but it's difficult or financially unattractive. The fund manager may (a) impose a very high initial charge, ( stop giving any discounts on management charges, © impose a very high minimum investment. The fund will also often be removed from "best funds" lists provided by brokers - usually at the request of the fund manager itself. So, to see if a fund's sloft closed, the easiest thing to do is to check the fund's information sheet to see under what terms it can be purchased. The financial press will also report when a popular fund is soft closed.

[fletchsmile]

AyG hit the nail on the head as usual. Attached is an example from HL on Aberdeen's EM fund. They felt they wouldn't be able to maintain it as a "best ideas product" if it got too big, so started levying higher entry fees to limit fund size

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-emerging-markets-equity-accumulation/research

Another example I hold was Standard Life's UK equity smaller company. Similar was done and removed from HL's Top 150 funds.

Also of interest on this fund is if you plot the charts over the last 5 years in the passive/tracker debate

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/s/standard-life-inv-uk-smaller-companies-accumulation/charts

If you select this fund, add comparisons for the UK small companies managed fund sector + compare to FTSE Small Cap and FTSE All Small indices, both this fund AND the Uk sector beat the index. Again highlighting certain markets, eg EM and small companies might differ to conclusions obtained for large US active fund vs US tracker. You can imagine for example how much decent research and active management could potentially add value when sorting the wheat from the chaff on small companies, given the number that fail/go under, particularly in recessions

Cheers

Fletch

[Luang]

If you're talking developed, liquid, mature markets I think there's a strong case for the ETF/tracker vs active managed.

Indeed for the US market I struggle to find a good fund that regularly outperforms, more so than most other markets. I'd also recall Hargreaves Lansdown one of my discount brokers for a while not having a US fund in their Wealth 150 (top 150 funds) because they didn't see a fund that they could with conviction rate as consistently outperforming the US indices. Even now they only have a couple.

You will also notice that almost all of the research links above refer to US style markets. Not a single one refers to Thailand. I've yet to see anyone post decent research on the Thai market. On the other hand my own experience since 1997 is that it's not that difficult to pick Thai funds that regularly outperform the SET index.

The other massive flaw with the research is that it simply looks at averages after fees. Of course average active managed funds will perform lower because of higher fees, that's a no brainer. The problem I have with that particularly in Thailand is who in their right mind picks a fund at random or throws darts in a board? If that's your idea, yes choose a tracker. On the other hand if you're prepared to spend time researching among others: fund management house, Morning Star ratings, brokers like Hargreaves Lansdown views, cumulative performance vs benchmark and peers, discrete performance vs bench mark and peers, number of times it comes in 1st or 2nd quartile, fund manager, tenor of fund manager, etc etc you can significantly move the odds in your favour. Also I remember in the UK I would never buy a fund run by a UK retail bank, as you were almost always guaranteeing below average performance. The best fund managers pay highest salaries to attract the best managers. Banks couldn't. Anyone in the UK will remember for example managers like Anthony Bolton that consistently added alpha.

Warren Buffet as per one of the above articles might be right that most people would be better of with a tracker. But a key point is he himself believes he can outperform, as I believe can people who do their homework, and understand what they are doing. I'd classify myself in the latter. But I fully understand for many people yes they might be better off with a passive tracker/ ETF.

Another example I like Aberdeen Thailand as a fund manager. I like their Thailand Growth fund. I wouldn't touch their American fund though. Understand your markets and your funds. Be careful though as active funds can also become victims of their own success, and become much larger which in turn makes it more difficult outperform, which is yet another factor. There are signs sometimes ABG may be getting to that stage (not there yet in my view) as its outperformance is less than it used to be

So yes I'd rather take 880% in Aberdeen Growth after a little higher fees than 276% in a SET tracker. JSixpack gives some other good Thai funds - it's also no coincidence these are Morning Star 4 or 5 rated and top the performance tables. But you index guys aiming for average performance and low fees go ahead and take the latter

Cheers

Fletch

Fletch,

All very well for the experienced investor and you have great advice for the actives out there, but this guy has literally none, hence why I suggested IF's/ETF/s. After fees (as you rightly mention) more managed funds under perform the market than out perform and a passive investor is likely to fall foul of one of these if they don't have the time/ exp to do due diligence.

And why does he have to invest in Thai stocks only anyway? He can set up an account in Europe or Singapore etc.

Is the founder of Vanguard wrong too?

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CDgQtwIwAQ&url=http%3A%2F%2Flive.wsj.com%2Fvideo%2Fjohn-bogle-on-the-rise-of-index-funds%2F48AE2CE7-60D5-42C6-A1E4-78560980B376.html&ei=Up_iUoLeINDboATWr4BQ&usg=AFQjCNFeJi7iPVcRLaEtLtTDI-ond4ERGQ

[isawasnake]

If you're talking developed, liquid, mature markets I think there's a strong case for the ETF/tracker vs active managed.

Indeed for the US market I struggle to find a good fund that regularly outperforms, more so than most other markets. I'd also recall Hargreaves Lansdown one of my discount brokers for a while not having a US fund in their Wealth 150 (top 150 funds) because they didn't see a fund that they could with conviction rate as consistently outperforming the US indices. Even now they only have a couple.

You will also notice that almost all of the research links above refer to US style markets. Not a single one refers to Thailand. I've yet to see anyone post decent research on the Thai market. On the other hand my own experience since 1997 is that it's not that difficult to pick Thai funds that regularly outperform the SET index.

The other massive flaw with the research is that it simply looks at averages after fees. Of course average active managed funds will perform lower because of higher fees, that's a no brainer. The problem I have with that particularly in Thailand is who in their right mind picks a fund at random or throws darts in a board? If that's your idea, yes choose a tracker. On the other hand if you're prepared to spend time researching among others: fund management house, Morning Star ratings, brokers like Hargreaves Lansdown views, cumulative performance vs benchmark and peers, discrete performance vs bench mark and peers, number of times it comes in 1st or 2nd quartile, fund manager, tenor of fund manager, etc etc you can significantly move the odds in your favour. Also I remember in the UK I would never buy a fund run by a UK retail bank, as you were almost always guaranteeing below average performance. The best fund managers pay highest salaries to attract the best managers. Banks couldn't. Anyone in the UK will remember for example managers like Anthony Bolton that consistently added alpha.

Warren Buffet as per one of the above articles might be right that most people would be better of with a tracker. But a key point is he himself believes he can outperform, as I believe can people who do their homework, and understand what they are doing. I'd classify myself in the latter. But I fully understand for many people yes they might be better off with a passive tracker/ ETF.

Another example I like Aberdeen Thailand as a fund manager. I like their Thailand Growth fund. I wouldn't touch their American fund though. Understand your markets and your funds. Be careful though as active funds can also become victims of their own success, and become much larger which in turn makes it more difficult outperform, which is yet another factor. There are signs sometimes ABG may be getting to that stage (not there yet in my view) as its outperformance is less than it used to be

So yes I'd rather take 880% in Aberdeen Growth after a little higher fees than 276% in a SET tracker. JSixpack gives some other good Thai funds - it's also no coincidence these are Morning Star 4 or 5 rated and top the performance tables. But you index guys aiming for average performance and low fees go ahead and take the latter

Cheers

Fletch

Fletch,

All very well for the experienced investor and you have great advice for the actives out there, but this guy has literally none, hence why I suggested IF's/ETF/s. After fees (as you rightly mention) more managed funds under perform the market than out perform and a passive investor is likely to fall foul of one of these if they don't have the time/ exp to do due diligence.

And why does he have to invest in Thai stocks only anyway? He can set up an account in Europe or Singapore etc.

Is the founder of Vanguard wrong too?

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CDgQtwIwAQ&url=http%3A%2F%2Flive.wsj.com%2Fvideo%2Fjohn-bogle-on-the-rise-of-index-funds%2F48AE2CE7-60D5-42C6-A1E4-78560980B376.html&ei=Up_iUoLeINDboATWr4BQ&usg=AFQjCNFeJi7iPVcRLaEtLtTDI-ond4ERGQ

I can't speak for anybody, but op was asking about Thai stocks, and I think the mutual funds would be the best way to go for the novice investor also. For the reasons that have been pointed out, the good funds have a tendency to outperform the market here, and op would get the immediate diversification. When fletch was mentioning the funds under-performing, he was talking about developed markets like the US (I think) , which he was saying does not really apply to Thailand.