LTF for 2015 and onwards

[donny453]

Been in thailand for 8months. I'm planning on buying LTF on a monthly basis starting in the new year as a way to save on taxes. What are your thougths on investing in thailand during its current state and future state ( some future events are predictable)

[fletchsmile]

Great investment... one of my favourites. Planning to be in Thailand long term, then it makes sense to build THB assets. Equities can be volatile, but the tax relief is a very nice cushion, and makes a good investment great.

What's stopping you take advantage of this year's allowance too?

Cheers

Fletch

[JMWPACIFIC]

What's an LTF?

[donny453]

Is for some reason I need to leave Thailand one day will I still be able to cash out on my investment when the times comes?

[fletchsmile]

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What's an LTF?

Long Term Equity Fund = a mutual fund/ unit trust invested mainly in Thai equities. You have to hold for 5 calendar years, in return for tax relief at your marginal rate of tax.

Is for some reason I need to leave Thailand one day will I still be able to cash out on my investment when the times comes?

Yes. Keep all your paperwork. Also keep your tax returns/salary. If you sell within 5 calendar years there's a penalty of the tax relief you claimed. If you sell after the normal term, no penalty.

Cheers

Fletch

[donny453]

Fletch, do you recommend a certain bank? My boss uses TMB and a couple co workers use bangkok bank. Is there a difference?

[fletchsmile]

Donny

You need to distinguish between who you buy the fund from and who manages the fund. Who manages the fund is generally the more important decision. So when you ask which bank is better you need to bear in mind the two roles banks pay.

Personally I buy thru Standard Chartered, they only market and sell the funds, they do not manage the fund. They have probably the widest range of funds available of any bank in Thailand, not just LTFs/RMFs and are not tied to any single fund management house. The main disadvantage - for some people - is purchases are paper based and no online purchase option. This doesn't bother me, as I tend to buy several funds at the same time, for up to 4 family members at once across different fund managers, so it save multiple logins and they just send a messenger with the forms to sign

Some banks sell mainly the funds of their own related fund management arms, so offer a narrower range, but often better platform and deal execution. Bangkok Bank are more like this

TMB are somewhere in between. Their own funds are largely passive funds or feeder funds. These can be a little cheaper in terms of fees sometimes, and cheaper minimum amounts, but I prefer the performance of more active managed funds.

LTFs to consider (rather than who you buy from):

- Aberdeen LTF

- UOB Good Governance LTF

These are available from several banks

- Bualuang LTF available only from Bangkok Bank

If you want dividends

- UOB Big Cap Dividend LTF

- Krungsri Dividend LTF

I own all the above except the Bualuang one from Bangkok bank. It's a good fund, but I don't want to bother opening an account specially with Bangkok Bank's Asset Management arm. They all have shown consistenly good performance over longer periods

Cheers

Fletch

Edited January 1, 2015 by fletchsmile