Krung Thai Asset Management (KTAM) is leading the pack to adopt tech-enabled solutions to drive returns and serve clients in Thailand, while pinning high hopes on tech-themed funds.
“Technology will change the way people live, and it will change the investment platform as well. We have to be able to capture all of that are happening in the world and in the investment industry,” said Chavinda Hanratanakool, chief executive of KTAM.
“The world around us and the investment landscape are very dynamic. We need to keep ourselves up to date all the time,” she said.
The Thai fund house is deploying cutting-edge technology in its business and investment operations, contrary to the common perception that KTAM is a traditional asset manager as it belongs to a state-backed bank. It is the investment subsidiary of Krung Thai Bank, the second largest bank by assets in Thailand.
KTAM is among the only two bank-affiliated asset managers in Thailand that are using artificial intelligence (AI) to enhance investment process. It is aiming to be one of the best fund manufacturing firms in the country, Chavinda said.
The AI system, known as Brain, is used to select equities based on financial metrics that are directly correlated with the stock price, such as profitability ratio, liquidity ratio and efficiency ratio in operations.
It helps to choose the most investable stocks among a universe of Thai stocks, and fund managers at KTAM then pick the top 30 stocks among them for its AI equity fund. This greatly enhances the investment efficiency and reliability.
“We are planning to implement the system across asset classes as well. It will not only focus on the equity part. It may help in thematic investing, depending on what kind of themes we want to go for,” she said.
The system will also help KTAM to select stocks in a more granular way, such as focusing on a single market in Asia or in emerging markets. It will have more applications in the future, she said.
KTAM is also building a robo-advisory system to better serve investors. The tool, which adopts AI and big data and allow investors to readjust their portfolios, is expected to be up and running by the end of 2021.
KTAM’s AI-powered solutions also enables the fund house to offer tailor-made services to institutional investors. For example, KTAM has developed an internal portal which individual members of the Thai Provident Fund can easily use to keep track of the funds’ investment performance and the net asset value.
“We are very serious in developing the system. It was developed in-house by our team for the pension fund and is upgraded all the time,” she said.
The fund house is also using a variety of digital platforms to engage clients, including Facebook, YouTube, Twitter, Clubhouse, Podbean and Spotify, so that investors can reach out to KTAM every day when the possibilities for face-to-face interactions are reduced during the pandemic. KTAM can also continuously analyse the needs of the investors.
“I can claim that KTAM has the highest number of access channels in terms of social media. Thai people love hearing information more than reading them. The relationship building works well,” she said.
KTAM will also be revamping its mobile application to enable easier account openings via facial recognition, so that investors can open a mutual fund account without having to visit the bank or provide hardcopies in the future.
Its proactive investor engagement is among the reasons why the fund house managed to grow its asset under management (AUM) during calamitous times fuelled by the pandemic. Its overall AUM reached $26.6 billion as of February this year, representing a 20.31% growth compared with a year ago. This continued a strong rate of growth that has averaged at 11.7% per year since 2006.
The asset manager also believes technology is one of the investment themes that is best placed to benefit as Covid-19 accelerates the adoption of technology, while also favouring environmental, social and governance (ESG) investing.
Consumer behaviour has changed during the pandemic. For instance, e-commerce that draws on technology has become an integral part in people’s everyday life. Technology will help to build a seamless world and only companies that can adjust themselves to the new world and evolving consumption patterns can survive, Chavinda said.
“We see what kinds of themes will become the winners in the future. If you choose the winners, you don't have to worry about volatility in the short run,” she said.
In fact, technology funds and China funds are the two types of products that perform the best during the market plunge last year. The KTAM tech fund delivered a stellar return of 77.38% in the year of 2020.
“Technology funds and regional funds have performed quite well last year even though the Thai market dropped a lot last year. We are the one who can break the tide during the crisis,” she said.
In fact, KTAM launched a World Technology Artificial Intelligence Fund in 2018 before thematic investing and active exchange-traded funds (ETFs) were taking over the headlines. The fund just crossed $215 million in AUM, demonstrating that KTAM stays ahead of the game with its products that encompasses new technology.
KTAM was named as the best fund house in Thailand by AsianInvestor in 2021.