Fear of missing out on gains keeps Thai funds in positive territory

Investors remain invested in mutual funds sold in Thailand for fear of losing out on any further market gains, says Lipper.

Mutual funds registered for sale in Thailand posted an average gain of 1.6% in July, bringing the average return for the first seven months of the year to 15.51%, according to data from Lipper.

"It was not too long ago that investors were concerned about the return of capital rather than the return on capital," says Ivan Ng, a Singapore-based research analyst for Asean at Lipper. "It was fear then, and it is fear now -- the fear of missing out and the fear of regret as markets climbed for the fifth consecutive month."

Equity funds were the top performers, with an average return of 4.03%, followed by mixed-asset funds, with an average return of 2.67%. All other fund groups turned in positive performances on-average for July. The benchmark Stock Exchange of Thailand (SET) Index was up 4.44% for the month of July and 38.68% in the first seven months of the year.

It appears the global crisis of 2008 has been pushed to the back of investors' minds, Ng notes.

"We forget just how globalised and interlinked by trade and capital flows economies are in the world today. While it is true that Asia as a whole has come through the last few months shining brightly compared to the dullness and the malaise of the debt-laden West, we have to remember this is a relative -- not an absolute -- comparison," says Ng. "Any unwelcome surprise from here will dampen exuberance greatly."

Seventy new funds were launched in Thailand in July: four equity funds, two mixed-asset funds, and the rest composed of short-term money market funds and government bond funds.

Of the equity funds, one is an exchange-traded fund investing in large-cap Thai stocks; two invest in US equities; and one invests in Greater China.

Number of new fund launches in July, according to Lipper.

  • Asset Plus Fund Management - 2
  • BBL Asset Management - 12
  • BT Asset Management - 1
  • ING Funds (Thailand) - 2
  • Kasikorn Asset Management - 12
  • Krung Thai Asset Management Public - 4
  • MFC Asset Management Public - 3
  • One Asset Management - 1
  • PrimaVest Asset Management - 1
  • SCB Asset Management - 16
  • Siam City Asset Management - 9
  • Thanachart Fund Management - 1
  • TISCO Asset Management - 2
  • TMB Asset Management - 3
  • UOB Asset Management (Thai) -1
  • Total -70
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