How about Mutual fund/ fixed income fund Thailand ?

[flakes]

Hi,

I consider to invest money in some lower risk Mutual funds and or fixed income funds in Thailand.

Example K Bank offers 3,2 % on a fixed income fund account there is no tax to pay but the percentage is not fully quaranteed.

Krungsri has alot of these lower risks funds also...Then i saw also mutual fund of Aberdeen.Who has experiences these type of investment funds?

Greetings,

Flakes

[fletchsmile]

When you say fixed income mutual funds it depends what you're looking at.

For Thailand bond funds:

- I don't find the yields on govt bonds very attractive. Perhaps a way to take a view on the THB but the yields aren't much better than cash

- Thai corporate bonds fare a little better. I hold a small amount TMB's Corporate Bond Fund. The returns are more volatile than cash, but obviously less volatile than equities. I can't say I think it is significantly better than cash, but makes a change and a bit of diversification from cash. I dipped my toes in and have hardly added to it. I may do in the future if rates pick up and prices fall so yields are better. Otherwise can't be bothered much with it compared to cash.

Overall in both the Thai sovereign and Thai corporate bond categories I don't think you're missing much if you hold your money in a decent cash account instead at the moment

For International Bonds or Mixed Global/Thai Bonds the returns can bet better

- I like and hold Aberdeen Global Emerging Markets Bond Fund. It tops the 3 year and 5 year annualised returns on MorningStar Thailand, with annualised returns of 11.61over 5yr and 7.26% over 3 years. That's pretty decent for a mutual fund in fixed income. The higher yields though are obviously due to EM yields. The fact it is down 3.49% over 1 year is a reminder it is not all smooth sailing and it is more risky than cash, but obviously more reward

http://tools.morningstarthailand.com/th/fundquickrank/default.aspx?Site=th&LanguageId=en-TH

- I also hold TMB Global Bond Fund. It's a feeder fund into Templeton Global Bond Fund and 3 year annualised return is 5.65%

Both the above are therefore backed by solid fund management houses and available from Thailand

Compared to cash rates of say 3% on a good account, the Global Bond funds are a reasonable possibililty for extra return. I started adding to them a few years back as I felt I was too heavily weighted to equities (still am really and appreciated the diversification, as well as potential above cash, and convenience of buying from Thailand.

If you have the time and build the experience, and have the money, buying individual bonds may be a better option in some ways. Fees do eat into returns on the low fixed income yields, and on an individual bond you can look in your actual return, whereas on mutual funds the capital goes up and down, and as bonds mature or are sold new ones are added, so you never lock in a rate.

eg I bought some CP All debentures in the wife's name a few months back and locked in a yield of 4.1% for 3 years. I expected low rates in this 3 year period, and possibly even rate cuts, so with 3% on cash and possibly less if and when rates fell/fall: 4.1% was OK to shift some spare cash into that I din't want to take equity/gold/FX or most other risks on.

Aside from the fluctuating capital and not locking in a yield, a big caveat is also to look where we are in the interest rate cycle. Past returns have benefited from capital appreciation as interest rates fell. Rates don't have much lower to go so that is unlikely to be repeated. Thai interest rates may fall a little further, and may stay low for a while, but eventually will start to pick up and therefore capital losses may follow.

Cheers

Fletch

Edited January 29, 2014 by fletchsmile

[flakes]

hi Fletch,

Thanks your complete reply.

I might seek contact with Aberdeen and see what their advice will be.

By the way what is difference between a Mutual fund and a fixed income fund ?

I will send you a pm also if it is okay..

br

flakes

[AyG]

By the way what is difference between a Mutual fund and a fixed income fund ?

Mutual fund refers to the structure. A fund manager takes money from a number of individuals and invests it, typically in equities (shares) and/or bonds.

A fixed income fund is a mutual fund that invests exclusively in bonds (and has a little bit of uninvested cash, too).

[ExpatJ]

There is a Thailand ETF-iShares MSCI Thailand Capped ETF - half the fees of Aberdeen plus it pays a 3% dividend.

[meand]

You could consider balanced funds that hold both equities and fixed income.

[seb2015]

Hello everyone

I'm trying to get a read on the best platform to manage mutual funds investments while living and working here in Thailand and would appreciate your advices on which direction I should go.

Baluang (Bangkok Bank) online platform is quite convenient but does only offer to Buy/Sell their own products

Standard Chartered seems to sell a mix of house and brokered funds (I read more than 120 in total), but I haven't heard/found if you can manage your activity online. Fees are pretty well indicated for each fund though.

Aberdeen eavenue seems the most ergonomic, but I'm afraid the offer is restricted to in-house products..

PhatraDirect seems to have the biggest choice on offer (+1000 funds) but only little information is available on their website and I'm not sure of the fees as well as how reliable they would be for investments in LTF (yearly statements etc..)

All in all, I'm trying to find the best way to avoid maintaining multiple passwords, account books etc but haven't found a good solution so far .

Thanks for any info you'd have!

Sent from my iPhone using Thaivisa Connect Thailand

[AyG]

I'm trying to get a read on the best platform to manage mutual funds investments while living and working here in Thailand and would appreciate your advices on which direction I should go.

Unless you're Thai, I rather doubt a Thailand platform is going to be best for you. Keep your investments offshore and avoid any Thai tax implications.

Far better in my opinion to look at offshore platforms (Luxembourg, Singapore, &c.). But which platform depends upon your nationality (I hope you're not from the USA for your sake), investment objectives, and your level of investment experience.

So, where are you from? Are you looking to invest a significant large amount (say $100,000 or more)? And how much investment experience do you have?

[fletchsmile]

Hello everyone

I'm trying to get a read on the best platform to manage mutual funds investments while living and working here in Thailand and would appreciate your advices on which direction I should go.

Baluang (Bangkok Bank) online platform is quite convenient but does only offer to Buy/Sell their own products

Standard Chartered seems to sell a mix of house and brokered funds (I read more than 120 in total), but I haven't heard/found if you can manage your activity online. Fees are pretty well indicated for each fund though.

Aberdeen eavenue seems the most ergonomic, but I'm afraid the offer is restricted to in-house products..

PhatraDirect seems to have the biggest choice on offer (+1000 funds) but only little information is available on their website and I'm not sure of the fees as well as how reliable they would be for investments in LTF (yearly statements etc..)

All in all, I'm trying to find the best way to avoid maintaining multiple passwords, account books etc but haven't found a good solution so far .

Thanks for any info you'd have!

Sent from my iPhone using Thaivisa Connect Thailand

As you're finding, for online platforms each provider is often limited to its own funds/ in-house. e.g. Aberdeen, UOB/ING/Bualuang/TMB/KTAM etc etc

Stan Chart does have a reasonable range on offer. As they themselves aren't fund managers they offer a wide range from the other institutions so are not tied to just their own products.

Unfortunately their platform doesn't let you buy and sell online. Online all you can do is long in to your internet banking, see your fund holdings and prices / valuations. They're my preferred choice despite the lack of platform because you can access such a wide range under one umbrella. Also you can count your asset holdings towards their priority banking service and get your own RM. (THB 3mio+ for Priority). I have an excellent RM, very helpful, fluent English that helps mitigate some of the headaches of the Thai banking system. Great also when I'm out of the country

Unfortunately though to buy and sell funds I can't do online. Instead they send a messenger to our condo, I sign the forms when I get home, and next day they collect

BTW I used to go direct to Aberdeen and have found them one of the best all round for the last 15 years or so (post Asian Financial Crisis). Just as you say they only sell their funds.

I find it very convenient to hold funds here for me, my Thai wife and kids. No capital gains tax, often no income tax, and branch not far away. On the other hand I do use platforms outsie Thailand and don't keep all my investments here.

Cheers

Fletch

[seb2015]

Thanks Fletch for your explanations. I agree that buying / selling online is less important eventually than having your portfolio managed through a single account. I will look for more info from Stan Chart especially that one of their branch is close to where I live.

Ayg, thanks for your cautious advice. To tell you a bit more , I'm a 30 y.o. FR expat and have been working on and off thailand for almost 3 years before settling with a more permanent job here this year.

The feeling that I might be living here on the longer term is why lately I'm looking more seriously at my financial options here.

I have to say that I have a little to almost no investment experience but feel like it's never too late to get started. That's why I'm ruling out trading stocks by myself as I don't have the knowledge / time it would require, and am more comfortable with relying on a fund structure even if the eventual charges are higher.

I bought a flat in Paris early last year and have been very happy with the financial returns so far, but that now makes the major part of my capital located overseas. Also knowing that ill always have a roof under my head should anything happen, makes me quite open to get invested in Thailand, and, believing that the economy will do fine on the long run, would have no problem to look at investments on a 5-10years period.

My starting capital would be close to 3.5M THB and I would have thought about the below dispatch:

500 k on a LTF (I think that's a relatively low risk with the tax relief should the capital depreciate)

500k parked on a savings account (should anything happen) or on a fixed income fund provided I could withdraw overnight (was looking at Bangkok Bank funds which seem to be easy to step in and out for an acceptable interest rate)

1.5 M on which I could accept higher risk and volatility for greater long term returns (REITs or Equities funds I would think)

1M that I would expect to locked for not more than 2-3 years should I decide to get started with some more independent professional projects.

-----

That's probably how it would look like in the end, I guess.

As I'm in no rush I would plan to use a cost averaging method, also reinvesting my monthly savings in the same proportions.

Seb

Sent from my iPhone using Thaivisa Connect Thailand

[AyG]

I will look for more info from Stan Chart especially that one of their branch is close to where I live.

The feeling that I might be living here on the longer term is why lately I'm looking more seriously at my financial options here.

I have to say that I have a little to almost no investment experience but feel like it's never too late to get started. That's why I'm ruling out trading stocks by myself as I don't have the knowledge / time it would require, and am more comfortable with relying on a fund structure even if the eventual charges are higher.

Would have no problem to look at investments on a 5-10years period.

My starting capital would be close to 3.5M THB and I would have thought about the below dispatch:

500 k on a LTF (I think that's a relatively low risk with the tax relief should the capital depreciate)

500k parked on a savings account (should anything happen) or on a fixed income fund provided I could withdraw overnight (was looking at Bangkok Bank funds which seem to be easy to step in and out for an acceptable interest rate)

1.5 M on which I could accept higher risk and volatility for greater long term returns (REITs or Equities funds I would think)

1M that I would expect to locked for not more than 2-3 years should I decide to get started with some more independent professional projects.

"I will look for more info from Stan Chart especially that one of their branch is close to where I live."

Approached them last week about opening a savings account. Let's just say they're not foreigner-friendly here.

"I might be living here on the longer term is why lately I'm looking more seriously at my financial options here."

You need to distinguish between "financial options here" and "exposure to the Baht". Most of the Thai mutual funds don't impress me. For Thai equity investments you can do better with non-Thai funds. However, for bank deposits, within Thailand is the way to go.

"I'm ruling out trading stocks by myself as I don't have the knowledge / time it would require"

Smart. It's important to know your own limitations. Timing the market, investing in individual stocks are both unacceptably high risk for most investors. Stick to easy-to-understand, well-diversified investments.

"Would have no problem to look at investments on a 5-10years period."

Had you written 10+ years the case for a substantial commitment to equities would have been clearer cut.

"or on a fixed income fund provided I could withdraw overnight"

These are not an alternative for bank fixed term deposits. You may not get back the money you put in. Your emergency reserve should be in a bank account, not a fund.

[DividendGuy]

If you are planning on living in Thailand long-term, if you want a long-term stable income then go the smart way and invest in non-cyclical income producing dividend stocks here in Thailand and remember, you keep getting a "dividend salary" twice a year which most people need. It isn't any more difficult than the other ways of investing and actually it is easier when you do some studying/research and can understand what types of dividend stocks you are looking for. As the years go by you get an increase in the dividend payouts, you don't have to pay a fund manager, you can do Baht cost averaging, the value of your stocks will rise, you are earning in Thai Baht, and the best part is; you are in control of your investment direction instead of counting on others who might not have your best interests at heart...it honestly is a win-win situation for you.

It is not so difficult to learn how to invest in dividend producing stocks...just go to the SET library and check out those books that will help you to understand what you need to learn regarding dividend shares.