Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
AFMÆs new fund will invest a minimum of 65% of total assets in equity securities and will also be allowed to invest some assets into derivatives, as permitted by the countryÆs Securities and Exchange Commission (SEC). The end goal will be generate returns of over 10% over the long-term after an expected 6% dividend yield for the market in 2007.
JF Asset Management used to have a mutual-funds joint venture with AFMÆs parent, Bank of Ayduhya, but JFam sold its stake back last August. AFM now has Bt43.3 billion ($1.33 billion) of assets under management.
The new fund will comprise of 27 of the 400-plus stocks on the SET. Out of this basket, the Ayudhya Dividend Stock Fund will not hold any securities with more than 10% of the net asset value (NAV) of the fund. At the time of writing, at least 19 unnamed securities have been selected by AFM for this portfolio.
Although the exact composition of the fund has yet to be decided, AFM has revealed that many of the stocks would come for consumption plays and businesses that are relatively immune from the current political and economic troubles in Thailand. AFM also contends that in this environment a fund relying purely on dividend payments would prove to be a safer investment that the volatile Thai equity market which has dropped off significantly since December.
In 2006, the firmÆs long-term equity dividend fund, now with Bt844 million ($26 million) in assets, posted a 15.23% return for the year, despite the fact that the SET indexÆs average dividend yield was 4.75% over the same period. Last year, the dividend yields on the SET trailed only those found in New Zealand across the Asia-Pacific.
AFMÆs initial public offering for the fund runs through to 21 March. The minimum investment for the fund will be Bt10,000 ($306).
Currently, AFM has approximately Bt43.3 billion ($1.33 billion) in assets under management and has a seen a 4.9% rise in assets since the end of 2006.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains