“Household savings is growing compared to GDP and that will move into the wealth management industry," Bhambani said in an interview with Fund Selector Asia.
"Over last four years, Thailand’s mutual fund AUM has been growing at 13-14% CAGR. It’s an indication that clients are investing in wealth management products for a better return for slightly higher risk compared to savings product.”
Bhambani, who has been with Standard Chartered for 15 years, was previously executive director and head of investment strategy and wealth sales in India. He was appointed to the position in Bangkok in April.
Thailand-Singapore fund selection
In Thailand, the bank provides advisory services. Products can be offered to all sections, corporate, commercial or retail. Within retail, HNWIs are in the priority banking segment, where clients have a minimum of 3m THB ($100,000) in investible assets. About 60 relationship managers work in the priority client space.
"Over last four years, Thailand’s mutual fund AUM has been growing at 13-14% CAGR"
Fund selection for Thailand is done together with Standard Chartered in Singapore.
The process begins when a fund house is shortlisted. Once a firm is approved, then the products the bank likes are identified and the approval process starts again.
The bank does its own due diligence on local funds and works with Standard Chartered in Singapore on the selection process.
All products get approved by the global team in Singapore, but Bhambani can influence fund selection.
“In each stage it’s a two-way talk. We may think a particular equity strategy may work well in Thailand and here’s a product. We would do our due diligence and then recommend it for Thailand distribution. Then the group level looks at it.”
More global minded
Thais have a bias toward local investment products, but that is clearly starting to change. Clients are becoming increasingly interested in global funds, he said. “That’s been happening over the last year or so.”
Moreover, Vira-anong Phutrakul, managing director and head of retail banking at Citibank in Bangkok, has pointed out that new Thai regulations opening the door for wider fund offerings could be finalized this year.
Standard Chartered has relationships with about 10 fund houses, and the product mix in Thailand is roughly 30% foreign investment funds, he said.
The bank has recently approved multi-asset products for Thai clients, but Bhambani declined to name any funds or fund houses.
According to the bank's outlook, equity markets are expected to provide better returns than fixed income over the next 12 months, but with near term volatility, he said.
The overweight positions are Europe, Japan and China equities, and the rest of Asia is underweight. US and India equities get a neutral rating. India’s market has had a huge run up and the bank went from overweight to neutral.
“India earnings are expected to be muted for the next few quarters and the reforms are yet to reflect in the numbers,” he added.
As Thais open to more international investing, investors need to keep up with the accelerating pace of change in markets. Bhambani finds the challenge in continuously staying ahead of macroeconomic trends and their impact on asset classes.
“Should we be investing in the US or in Europe or China or Japan? In the advisory process, we have to stay ahead of the curve.”