krungthai equity went south

[georgeubon]

yesterday, the set index was up by 8 points but one of the krungthai equity fund dropped more than 5 percent.

Can some one explain or it is because dividend payout will be coming soon when thing like this occurs??

[bazza40]

It depends on what that particular equity fund is doing. It could be going ex-dividend, in which case the price will usually drop.

On the other hand, part of its investment strategy may involve dealing in options. If it's trying to follow the index, buying call options would mean the price goes up. However, if it has bought put options as a hedge, when the index goes up the put options decrease in value.

Funds usually have prospectus which details the investment strategy, although that doesn't necessarily mean the strategy is faithfully followed.

[Ludacris]

Because the fund doesn't own the exact same stocks in the same proportions as the index.

Take today for example:

SET Index +0.15%

Mid-Cap +0.53%

Small-Cap -0.15%

Construction +3.09%

Mining -2.81%

And that range is on a slow day.

http://marketdata.set.or.th/mkt/sectorialindices.do?language=en&country=US

It might be a good idea to go out and buy a few books on investing and mutual funds before proceeding further...

[georgeubon]

most of the time, SET index is green, krungthai selective equity fund, KSEF, is green also, after updated at around 8pm local time. However, there are a few times where SET Index is red a little bit like 10 or less, KSEF is still green (Which i like). And then there are a few times where SET index is green and KSEF is red a little bid, like less than 0.5percent (which i am not scared off).

BUT yesterday was a sad day , SET index is green for about 8, and KSEF went down 5 percent. Unbelievable. All my profit just went away. I guess i was too greedy and did not sell the fund two , three days ago when i was up a million baht. I thought it will go up two , or three million baht more and plus i will also get dividend.

Now, i am back to square one again.

Next time, should i jump out when i am up a milliion baht????? Also, how can you tell when they will give out dividend because that is a lot of money also, because if 1baht per dividend and a million unit is also another million bahts.

I go with instint, i have no clue and don't read book so any good advices are very needed and thank you.

[fletchsmile]

Would help if you could tell us which fund. Could be a variety of reasons.

Most likely one factor is it went ex-dividend (xd), although 5% is a bit high for a div payment on a Thai equity fund over last 12 months

Possible that it could be due to the different make-up of the fund compared to the index, but unlikely, as funds are commonly limited to no more than 10% in a single stock, plus 5% is a very big move in a day for a fund, let alone 5% diff to the index.

Possible also you may have been looking at different dates. I find KTAM's website one of the most annoying around, and they are often slow to update it on prices, announcements. Every month-end I update prices for all my investments. KTAM funds are always the last to show the prices I want - although that's on foreign funds. Similarly their other news is rather tardy.

Unlikely it's to do with hedging or derivatives. The TFEX options market really doesn't have the volumes to account for someone buying puts or calls (paying premiums) to the value of 5% of a Thai mutual fund. Volumes are higher on futures, but given the index only shifted by 8 points that would require a very high volume, and it's not that common for Thai mutual funds to use high values of derivatives.

Could be other reasons, eg simple error in pricing, mistake on the website etc, etc, but without knowing the specific fund and date, it's going to be hard to tell

BTW: Could also be a combination of factors

Cheers

Fletch

Edited February 13, 2015 by fletchsmile

[InvestingIsMyLife]

1. I agree with Ludacris. It's best you go out and buy some books on investing.

2. Why do you want to invest in funds? After fees and commissions, you'll find you'll be visiting "square one" a lot.

[Ludacris]

The OP has stated:

"I go with instint, i have no clue and don't read book so any good advices are very needed and thank you."

If you're not a troll, please report back in a year or two about how this method works out for you.

To ease your future pain, you may want to trade with only a few percent of your net worth until you have come to your senses.

[georgeubon]

)the fund is krungthai selective equity fund (KTSE), and no , it is not an error, the chart also went downhill significantly.

Thank you Ludacris for a big advice. I will try to be careful in the future. I think i better hope this fund will go back up and cash it out each time it give me a good profit.

[Crash999]

most of the time, SET index is green, krungthai selective equity fund, KSEF, is green also, after updated at around 8pm local time. However, there are a few times where SET Index is red a little bit like 10 or less, KSEF is still green (Which i like). And then there are a few times where SET index is green and KSEF is red a little bid, like less than 0.5percent (which i am not scared off).

BUT yesterday was a sad day , SET index is green for about 8, and KSEF went down 5 percent. Unbelievable. All my profit just went away. I guess i was too greedy and did not sell the fund two , three days ago when i was up a million baht. I thought it will go up two , or three million baht more and plus i will also get dividend.

Now, i am back to square one again.

Next time, should i jump out when i am up a milliion baht????? Also, how can you tell when they will give out dividend because that is a lot of money also, because if 1baht per dividend and a million unit is also another million bahts.

I go with instint, i have no clue and don't read book so any good advices are very needed and thank you.

KTSE like other funds are made up of a variety of investments. In order to understand why the value of the fund moves you need to take a look at the composition and value of the individual components. I did a quick search and can't find a detailed prospectus for KTSE but I did find that the #1 and #2 sectors invested are real estate and service. On the SET website you can search for the values of individual equities to see how they performed yesterday. It's not unusual for the SET to go one way and a fund to go the other, simply because the value of the components that make up the SET and KTSE isn't the same.

As for dividend payment dates you'll need to ask KTB, ideally the person from whom you bought the fund as they should be earning their commission.

Regarding timing it's impossible for a single investor without unusual resources or info to time the market, to know when exactly to buy or sell. But it's important to remember what drives the underlying value of your investments. With KTSE as its investments are located mostly in Thailand your thinking should be more about what is the potential for future growth of the Thai economy instead of thinking about how much money you've made (or lost) so far. Also consider any cost/penalty that you would take when cashing out or buying something else.

In summary don't worry too much- you haven't done anything wrong.

Edited February 13, 2015 by Crash999

[paddyjenkins]

Quite possibly the explanation is not about the obvious culprits of differences versus the SET etc, or any of the rest of what I just glanced at above. Funds are often illiquid. I would suggest investigating the possibility that somebody sold, probably in size. The question is then who and why.

Edited February 13, 2015 by paddyjenkins

[AyG]

Looking at the fund's dividend history, there's no obvious pattern to when the dividends are paid.

I haven't been able to find any announcement of a dividend this year, but there were a dividend of 1.0 Baht declared (similar to some previous dividends) this would account for a 6.9% fall in the price (from 14.5353).

There's no other obvious explanation (apart from a mispricing which should be corrected by the next closing price).

[SheungWan]

most of the time, SET index is green, krungthai selective equity fund, KSEF, is green also, after updated at around 8pm local time. However, there are a few times where SET Index is red a little bit like 10 or less, KSEF is still green (Which i like). And then there are a few times where SET index is green and KSEF is red a little bid, like less than 0.5percent (which i am not scared off).

BUT yesterday was a sad day , SET index is green for about 8, and KSEF went down 5 percent. Unbelievable. All my profit just went away. I guess i was too greedy and did not sell the fund two , three days ago when i was up a million baht. I thought it will go up two , or three million baht more and plus i will also get dividend.

Now, i am back to square one again.

Next time, should i jump out when i am up a milliion baht????? Also, how can you tell when they will give out dividend because that is a lot of money also, because if 1baht per dividend and a million unit is also another million bahts.

I go with instint, i have no clue and don't read book so any good advices are very needed and thank you.

If you lost 1 million baht because the share went down 5%, then your overall position is around 20 million baht in this one fund. Is that correct?

[AyG]

Next time, should i jump out when i am up a milliion baht????? Also, how can you tell when they will give out dividend because that is a lot of money also, because if 1baht per dividend and a million unit is also another million bahts.

I go with instint, i have no clue and don't read book so any good advices are very needed and thank you.

Equity investments should be considered long-term investments. Hold for a minimum of 5-10 years. So no, you shouldn't jump out when you're up a million baht.

You should receive the dividend payment within the next two weeks based upon previous dividend history. (It has been as little as 4 days in the past.)

I'd suggest that you simply reinvest the dividend in the same fund. That way your total return will be in line with the fund's performance.

As others have suggested, going with instinct is not a good idea. Indeed, it's a pretty surefire way of getting substandard performance. Instinct is largely influenced by recent fund performance and "facts" one picks up from various sources of questionable reliability and impartiality. Neither is a reliable indicator of future performance. To invest well takes a lot of time learning about investment in general, and studying individual potential investments in depth. It also takes a lot of discipline, for example, the discipline not to sell when values fall, the discipline to sell after a period of frothy performance, and the discipline not to be drawn to investments which have recent high performance. After all, as we're constantly reminded, past performance is no guarantee of future performance.

[georgeubon]

once again , thank you Ludacris. This serve as a reminder for all people investing. For me, I am hoping this fund will get back above 14.5 again. It was 17 at one time, and right now stand around 13.7 or something. I will jump out. And be happy for that. And then, one of future day of the whole year when it will be dropping down and then i will jump back in.

The lesson i have learned is that don't be greedy. Hoping for 2, 3 million. Be happy with having a profit then lost everything like Ludacris said which is 100 percent correct.

[SheungWan]

Never mind the long-term investment milarky. Mate of mine just jumped in and out of Tullow and trousered a few grand for his troubles.

[fletchsmile]

I think the lesson should be understand what you're investing in

In your shoes I would also have contacted the person I bought the fund through or the fund management company and asked them to explain the movement. It is unusual.

Could be that there is something on the website in the next couple of days that helps too, as they're generally poor at updating it on a timely basis

Cheers

Fletch

Edited February 14, 2015 by fletchsmile

[AyG]

Never mind the long-term investment milarky. Mate of mine just jumped in and out of Tullow and trousered a few grand for his troubles.

Would your mate also have told you if he'd lost a few grand in a similar manner?

People's memories can be very selective at remembering their profitable speculation, and forgetting the losses.

[utkb]

A joke attributed to Einstein goes - The most powerful force in the universe is compound interest.

For friends and relatives I would tell them to pick a fund they are comfortable in and do dollar cost averaging with dividend reinvestment. Then sit back and enjoy life without worrying about the daily fluctuations.

This strategy worked for my dad and is working great for my kids college funds, and as I approach retirement will be my strategy as well.

So given your comments above, I'm not sure why you don't take a similar approach.

[SheungWan]

Never mind the long-term investment milarky. Mate of mine just jumped in and out of Tullow and trousered a few grand for his troubles.

Would your mate also have told you if he'd lost a few grand in a similar manner?

People's memories can be very selective at remembering their profitable speculation, and forgetting the losses.

He told me the price he purchased at when he purchased. For sure he has the blagging rights this weekend.

Edited February 14, 2015 by SheungWan

[fletchsmile]

Turns out it was the most likely factor. The fund went xd on 12 Feb, and paid a dividend of 0.75 baht per unit, which is roughly the price movement you mentioned. It's not shown on the English version of the website. They haven't updated the dividend summary table on their website either for Thai and English versions. Here's the Thai notification though:

http://www.ktam.co.th/FileUpload/Content/FileTh2_2183.pdf

It comes from the list of announcements in Thai here:

http://www.ktam.co.th/th/news/news.aspx?SubID=11&ID=11&ContentMenuID=2&level=1

If you compare to the English version of the website:

http://www.ktam.co.th/en/news/news.aspx?SubID=11&ID=11&ContentMenuID=2&level=1

you'll see they don't show English versions of all the announcements.

Really hope you didn't sell just because it went xd

Cheers

Fletch

Edited February 16, 2015 by fletchsmile

[SheungWan]

Turns out it was the most likely factor. The fund went xd on 12 Feb, and paid a dividend of 0.75 baht per unit, which is roughly the price movement you mentioned. It's not shown on the English version of the website. They haven't updated the dividend summary table on their website either for Thai and English versions. Here's the Thai notification though:

http://www.ktam.co.th/FileUpload/Content/FileTh2_2183.pdf

It comes from the list of announcements in Thai here:

http://www.ktam.co.th/th/news/news.aspx?SubID=11&ID=11&ContentMenuID=2&level=1

If you compare to the English version of the website:

http://www.ktam.co.th/en/news/news.aspx?SubID=11&ID=11&ContentMenuID=2&level=1

you'll see they don't show English versions of all the announcements.

Really hope you didn't sell just because it went xd

Cheers

Fletch

So let me get this right....the OP has a 20 million baht position in a single equity fund and doesn't really either know or know how to find out when the stock goes ex-dividend? Really? And I am assuming here if the stock went down 5%, that not only does the bank give a 5% dividend, but the payout is only 1 time per year... and the OP didn't know this?

Edited February 16, 2015 by SheungWan

[georgeubon]

thank you Fletchsmile so much. I am really appreciate you went out your way to find the info. Today i am so happy, at least i am praman jet cent ha muong richer than yesterday. Thank you again Fletchsmile.

Happy Chinese New Year to all . May your health abundant, money come in like floodwater flowing, money com out as turtle pace.