Thailand investors continued to put money into fixed income funds in the first four months of 2017, with inflows reaching THB320.6bn ($9.3bn). But allocation (multi-asset), income-oriented funds have also been increasingly popular. They gathered THB27.5bn, while equity funds had THB18.1bn net outflows.
Siam Commercial Bank was the top mutual fund asset gatherer so far this year (excluding money market funds). The bank attracted THB 100.3 bn in net new assets, mostly thanks to its success in selling its two global multi-asset income funds.
Top mutual fund net asset gatherers in Thailand, January-April 2017 by fund category
Data: Morningstar, in Thai baht, excluding money market funds
The SCB Global Income Fund and the SCB Global Income Plus Fund are now the two biggest mixed-asset funds in the Thai market. They also had the biggest net inflows year-to-date.
The global income fund was launched on 27 January 2017 and now has THB26.5bn in assets. The global income plus, launched 2 February 2016, has THB31.3bn.
Inflows into income-oriented asset-allocation funds signify that an increasing number of Thai investors are willing to accept higher risk in return for income
The bank’s third largest multi-asset fund, the income plus, experienced THB7.4bn of outflows in March, while a new product, the SCB Multi-Income Plus Fund, has accumulated THB 4.5bn since its launch in January 2017.
The success in new asset gathering by SCB’s allocation funds has propelled the bank to the first rank in the category by AUM, surpassing Kasikornbank, which was the leader as recently as December 2016.
Top five Thai mutual fund providers by assets under management in multi-asset funds
Data: Morningstar, in Thai baht, as of 30 April, 2017.
According to Kittikun Tanaratpattanakit, senior research analyst at Morningstar, the success of the funds can be attributed to the combination of product performance and the cautious attitude of investors, which has prevailed in Thailand since last year.
Thai investors still seek the safety of fixed income funds, but the inflows into income-oriented asset-allocation funds signify that an increasing number of them are willing to accept higher risk in return for income.
Share of AUM in Thailand mutual funds by category
Data: Morningstar, as of 30 April 2017
SCB Global Income Plus allocated approximately equally to fixed income (48%) and equities (41%) as of 30 April, according to Morningstar. It delivered a one-year return of 9.15% as of 12 May, outperforming the category.
The global income fund has delivered a three-month total return of 0.83%, also outperforming its category during the period.