There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
Equity funds suffered the most last year, with an average loss of 41.08%. All fund groups suffered losses on average last year, save for bond funds which posted an average gain of 3.17%.
Mutual funds were able to post a 2.86% average gain in December, however, thanks to the average 8.37% gain of equity funds. Gains in local and regional bourses in December helped boost equity funds, particularly those that invest in Japan, Thailand, Asia-Pacific small- and mid-cap shares, as well as natural resources, which gained an average 16.46%, 9.84%, 9.67%, and 7.67%, respectively. The best performing equity funds in December were Energy and Petrochemical Index (up 18.23%), Asset Plus Nippon Growth (up 16.46%) and Manulife Strength-Equity Value (up 14.68%).
The best returning equity fund for 2008 was TMB Gold ùthe only equity fund that ended the year with a positive return (up 6.32%).
On the local front, political tensions and the global financial crisis hit ThailandÆs stock market hard, with the benchmark Stock Exchange of Thailand index ending the year down 47.56%.
Suthee Luangaramkul, a research manager at Thomson Reuters Lipper, says the gains in ThailandÆs stock market in December and January have given investors hope of a turnaround. However, he sees no fundamental evidence to support a market rally except for the settling of the political disputes.
Thailand was saddled with political instability for the most part of 2008. There were many weeks of anti-government demonstrations, a declaration of a state of emergency, plus the stepping down of the prime minister and the election of a new one.
In September, Thailand's ruling politicians elected Somchai Wongsawat as their new prime minister. The People's Power Party (PPP) at first wanted to reinstate Samak Sundaravej, who was ousted from the job after a constitutional court ruled that appearing as a guest on a television cooking show represented a serious conflict of interest. However, some members of the coalition refused to support Samak, because even before his ousting, there was mounting pressure for him to step down due to various scandals.
As of October 2008, Somchai was unable to access his offices, which were occupied by protesters from the People's Alliance for Democracy. In December, Thailand's Constitutional Court banned the ruling Peoples Power Party and after defections from smaller parties the opposition Democrats Party was able to form a government, a first for the party since 2001. The leader of the Democrat party, and former leader of the opposition, Abhisit Vejjajiva was appointed as the new prime minister in December.
The global financial crisis and the slowdown in the global economy continue to hurt export-dependent Thailand.
ôGlobal recession remains a threat, and domestic economic indicators proved the Thai economy was deteriorating inevitably from the recession,ö he says.
The economic outlook for Thailand remains cautious, with a Thomson ReutersÆ poll showing a 2.8% median of projected economic growth in 2009, with the lowest forecast from the poll being a decline of 0.8%.
ôIf the economic slowdown prevails, it will of course impair the revenue and profitability of listed companies,ö Luangaramkul says.
To get the clarity they want to make informed portfolio decisions, asset owners and managers must now blend and adapt multiple sources of traditional and non-traditional data to create actionable insights, said speakers at a webinar hosted by AsianInvestor and IHS Markit.
The country's largest insurer Ping An set up a $62 billion green investment target by 2025. Several more players are also joining the hunt for sustainable assets.
The boss of Thailand’s second-largest pension fund hopes that proposed changes in the law will help her diversify more into overseas markets. She is particularly bullish on China.
Investors can still find spread premiums in niche private debt, with the asset class's prognosis looking strong, said a keynote speaker at AsianInvestor’s latest summit on Wednesday.