Put my savings to use

[khunPer]

I've been and am using Thai Mutual Funds, the so-called "Fund Book" in the banks, and I'm also using an on-line investment account on SET (Stock Exchange of Thailand) through SCB.

 

The mutual funds I've been choosing have done well, but you need to choose "right", like in all countries, and from all banks offering mutual funds, all over the World. I'm using KBank (Kasikorn), and SCB, and Bangkok Bank.

 

If you wish to play save with your money, you shall choose some "low-risk" mutual funds, typically marked in risk-factor "4" or "5"; however low-risk also mean lower potential gain. The funds aimed at bonds are accumulating and do not pay dividend, and you shall not pay any tax of the gain, when selling funds. KBank's "Kasikorn Asset Management" has an excellent English-language home-page for Mutual Funds – it's worth spending a little time to look through the various offers, before you decide; and remember, a historical performance is no guarantee for future gains...

 

You will need a normal savings bank-account to be assigned to your Fund Book(s) – in KBank, one Fund Book for each mutual fund you buy – and there will be a small fee when you buy and sell (deducted in your fund, or your payout). You'll pay "cash" when you buy, and when you sell, it takes from 1 to 5 bank-days before the money is into your savings account (time depending of which kind of mutual fund you are in). The system is as safe, as mutual funds in any bank (probably in the World) and you can choose between a variety, also aiming on foreign markets like China, or USA, or Europen Union; and you can choose between stocks only, dividend paying or accumulating, combined stock and bonds, and bonds only.

 

The Fund Books marked LTF (Long Term Funds) are with tax deduction, but based on keeping for minimum 5 years (you can however change between other LTFs), and RMF is retirement savings funds.

 

SCB (Siam Commercial Bank), and Bangkok Bank, and probably others have similar offers.

 

I'm using SCB on-line for SET trade. You can apply for SCB on-line as foreigner and trade directly on SET with marginal fees only. It requires a saving account with ATM in SCB – you use the ATM-feature to on-line instantly move money between your savings account and your stock exchange account – and a minimum deposit to get started (think it's only 30k baht, or was it 100k..?). Dividends are paid directly into your savings account.

 

About you funds in Britain, I cannot help, as I'm not British, but if you cannot invest on a British Bank's trading-platform, and wish to keep the funds outside Thailand, you can use another banker, for example Danish Saxo Bank with probably an on-line trading platform among the best (it's awarded like that). However, investing in Thai funds or SET, you avoid the exchange rate risk if you need to use the outcome here, in Thai baht.

 

Me, I would not bet too much with my 800k retirement deposit, which anyway need to be matured for minimum three month in a Thai bank before the annual extension of permission to stay in the Kingdom. You can find Thai banks giving you a fair market interest, at the moment around 1.5% p.a. (or more) – however YOU CAN consider a Fund Book investing in low risk bonds (probably at the moment giving you a money market gain, pretty close to 12-month fixed deposit, but no 15% tax withheld), and having a 3-month fixed deposit account to move the money into in due time before annual extension of stay.

 

Wish you good luck with you ionvestment plans...

[sidgy]

KhunPer, Thankyou for your time taken and details given. I already have a savings account with Kasikorn so your post very apt for me. Just one question if you have time to answer.. Is it best for me ,in your opinion, to open other accounts with different banks to spread my investments or
Just use the many fund options offered by Kbank?


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[khunPer]

45 minutes ago, sidgy said:

KhunPer, Thankyou for your time taken and details given. I already have a savings account with Kasikorn so your post very apt for me. Just one question if you have time to answer.. Is it best for me ,in your opinion, to open other accounts with different banks to spread my investments or
Just use the many fund options offered by Kbank?

It's always said to be advisable to spread one's investment to minimize loss.

On the other hand, I don't see Thai bank's offers of mutual funds that risky, it's merely a question of what funds you choose.

 

The reason that I use three banks is, that I started with an account in Bangkok Bank, which branch office physically is some distance from where I live, so when SCB opened just round the corner, I also began using them; and found they had a very good service (in my opinion). My GF has her savings in Kasikorn, which is due to she's also guardian for our daughter, and she could not have LTF's both shared as guardian, and some in her own name in SCB. So I also started to use some of Kasikorn's mutual funds, as they have little different offers from SCB; but after I could open an on-line SET trading account, I moved my funds out of Kasikorn and into SET instead, as I believe, it will be a better investment for me, when I'm in control of specific stocks – but my GF still has some of her savings in a variety of Kasikorn funds, including LTF.

 

Investment is about how much "ice" you have in the stomach; i.e. the more risk you take betting on a single or few horses, the more you you can gain – and loose – whilst betting on a wider number of horses, one will often win, but the balance of your price is limited, and so is the loss. Ask yourself – the bank will also question you, when opening a Fund Book – how many percent of my capital, will I accept loosing..?

If you play extremely safe, you will have fixed bank deposits only, and spread within the individuals bank's guarantee – high at the moment, but may go down to 1 million baht, so you may need a number of banks. In that way you'll gain about inflation only, maybe little less, so in practice you're lucky, when just about even. Taking a higher risk, how much can you afford to loose: 10%..? 25%..? 33%..? or..?

Some times market goes down and comes up again, sometimes comes up higher after being down; a pity to sell with loss and see it gaining a lot shortly afterwards; and a pity to keep funds just falling-and-falling, may even end worthless – I have tried too much ice... 

Everybody has their own opinion, some loose and some gain – like the success stories we hear about – I've been told, that professional investors for example has a 25% limit, i.e. if they loose 25% they sell out; and may buy back when the stock is way down, or may not. Some investors day-trade, others have a very long investment-horizon, and don't mind funds/stocks being low for quite some time, they'll come up higher.

 

Normally I don't wish to give specific recommendations – I'm not an expert, and I don't like people to loose, because they listened to what I believe in – but a fair spread between some bonds only with a steady historical accumulation slightly higher than inflation; and some dividend paying SET-stocks, avoiding currency fluctuations and risky markets like playing China and Russia and the like, even the bank assistent may recommend them. And I also realized, that Southeast Asian markets behave different from European, whilst for example property market was falling in Europe – one should avoid exposure into that level of business – it was actually gaining here in Asia; in hindsight I should have chosen the mutual funds in property, instead of reading negative Western news, and avoiding them...

[metisdead]

Inflammatory posts have been removed. 

[gamini]

buy bumrungrad. a well run company. thier shares have gone up 25% in the last few months.

[A1Str8]

Give it to me I will invest it for you. 

 

By the way mutual funds are like the worst way to invest your money. That's not even an investment. That's a way to put your money to sleep. Not very interesting. 

[sidgy]

KhunPer, again I thank you for time and insight. I think all things considered my approach to this is to take elements from yourself and Oxx , using several funds offered by Kbank and opening an account with TMB and investing in a few of their funds.
Thinking of starting initially with half a mill in each bank then adding around 50k each month or so.
Again I would like to thank all who took the time to offer their input


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[Oxx]

12 minutes ago, sidgy said:

using several funds offered by Kbank and opening an account with TMB and investing in a few of their funds

 

As a statement that does concerns me.  When starting out you should really keep to a small number of funds, say 3-5.  That way you can properly research them before you invest, and monitor their ongoing performance.

 

When you get more experienced you can consider adding more funds, but you'd probably never need more than 10 or so.

 

If you hold a lot of different funds, then you lose the potential to perform better than the market average, so would do just as well (or probably a little better) simply by buying broad ETFs.  Good investment involves a conviction that you are investing in the right areas and, equally importantly, avoiding the wrong ones.  Lacking conviction and investing too widely is poor investment.

[sidgy]

Hi Oxx
I was thinking of 3 funds from each bank, the additional monthly/bi-monthly payments would be going into these same initial funds



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[Oxx]

35 minutes ago, sidgy said:

Hi Oxx
I was thinking of 3 funds from each bank, the additional monthly/bi-monthly payments would be going into these same initial funds

 

May I make as bold as to ask which the six funds are?

[sidgy]

 
May I make as bold as to ask which the six funds are?

Not concluded yet but I am looking at TMB... Property income plus, Set 50, M plus
Kasikorn ... SET 50, KProp, KEnergy
Still researching and monitoring at the moment and will confirm/delete from my provisional list before any investment is made. I am still a while away from any initial investment


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[hugh2121]

You can invest in UK unit trusts, OEIC's, Investment Trusts. Via an offshore platform you can also buy shares as they are held in the platform name.

[Oxx]

1 hour ago, sidgy said:

Not concluded yet but I am looking at ...

 

A few things for you to consider:

 

TMBAM's SET 50 is a fund that simply tracks the SET 50 index.  Kassikorn Asset's SET 50 fund is exactly the same thing.  Is there any real reason to invest in both?

 

TMBAM charges are 0.88%/year, Kasikorn, 0.63%.  There's an ETF out there (TDEX, traded on the SET) charging less than 0.5%/year for the same exposure.  Why not invest in the ETF instead? (There are probably other ETFs out there providing the same exposure - possibly with lower charges.  I haven't checked.)

 

Small cap equities, over the longer term, have traditionally outperformed large cap equities.  Why only invest in large cap equities on the SET?  (Income shares have also traditionally outperformed.  A bias to small caps and to income has traditionally outperformed.)

 

By going for a passive investment you are buying the bad shares along with the good.  Couldn't an active manager screen out the bad, and so improve performance?

 

Do you know how TMBPIPF differs from KPROP? (It does in one very particular way which is why I strongly prefer TMBPIPF over KPROP.)

 

TMBMPLUS (a bond fund) has delivered around 2.2%/year since launch in 2010.  That's less than the benchmark (at 2.55%).  The difference is explained by the fund's charges.  Are you happy with 2.2%/year? That's probably less than inflation, so by investing you're actually losing money every year.  Are you OK with that?

 

KEnergy is, for me, ludicrously high risk.  Do you know what it invests in, and how those investments are going to fare if oil prices remain low, or if alternative energy sources really take off?

 

Based upon equal investment in each of the six funds you're suggesting:

 

• 33% Property
• 33% SET 50
• 17% Bonds
• 17% Energy equities

 

Does that look balanced to you? Don't you think it might be a good idea to include some international equities for better diversification? Isn't 33% in property rather a lot? And surely 17% in (high risk) energy equities is too much, isn't it?

[Bulldozer Dawn]

Sidgy

 

There is a good website to learn about the Thai stock market and other offshore investment opportunities located here.

 

Create and Manage Offshore Wealth

 

Historically there has always been a significant correction in global markets every 8 to 11 years.  We are now 8 years in since the GFC.  So if you want to start investing into equities it is essential that you cost average in.  That is drip your capital in don't just plonk the whole lot in right now. 

 

Personally, mindful of the next correction, I currently hold most of my net worth in non equities investments in a basket of different currencies.  However, I also have a smaller chunk of capital (about 6 million baht) that I use to trade on the SET.  I do not trade shares,  I have no interest in buying to hold Thai companies as I foresee a good deal of trouble on the immediate horizon.  I do however actively trade Thai derivative warrants every market day.   The advantages of trading warrants is that you can make money wether the market is going up or down, and you can also make money even if the SET is moving sideways like it is currently doing.  This is because warrants are leveraged and the price of its underlying share need only move a few satang to result in a healthy percentage gain.  For example on Friday morning I traded the put warrant for BANPU.  I bought it early morning and then sold  before lunch for a 10% profit. My invested capital was just a little over 50,000 THB so my net profit was about 5,000 THB less .015% brokerage.    The minimum lot of warrants that you are allowed to place an order for is 1000.  And if your warrant holding is more than 50,000THB in value you can use a trailing stop to automatically cut any losses if the market moves against you.

 

Given we are soon approaching another market correction (in both Thai and International equity markets) my personal advice for you would be to invest the bulk of your money into some low yielding safe investments across a basket of currencies, and then use a chunk of your capital to actively trade warrants on the Thai set.  You have free time to learn how to trade and to manage your money yourself.   Remember if you only get three out of every five trades correct (and the average win is 10%) you are still miles infront compared to the returns on managed funds.   You can also limit any losses using a trailing stop loss.

 

Any way if you are interested in my approach here are a few articles to get you started:

 

How to Value Thai Put and Call Warrants

 

Trade Thai Shares Not American Penny Stocks

 

360% Profit Trading a Thai Warrant

 

PM me if you want more info.