Year-to-date ending 30 September, Thailand’s mutual fund industry had net outflows of THB 40.43bn ($1.24bn), dragged down by fixed income funds, but offset by equity fund inflows.
The biggest outflow came from global bond funds (THB 83bn).
Among the bottom 10 Morningstar categories in terms of outflows, seven of them are fixed income funds.
Source: Morningstar
The market share of global bond funds in the context of foreign investment funds was down to 16.1% this year from 23.7% in 2017, the report added.
Global allocation funds continue to lead foreign investment funds with 23.2% market share despite having outflows of THB 11.72bn, the report noted.
Foreign investment funds’ total net assets (TNA) by market share
Source: Morningstar
High yield bond fixed-term was the only fixed income fund category that had net inflows so far in 2018 (THB 1.86bn), the report noted. The category performed positively this year, with returns of 2.2% year-to-date.
Fixed income funds were hit because of investor concern over rising interest rates and uncertainty around the planned imposition of tax on fixed income funds, the report said.
Pimco down
Because of the net outflows in global bond funds, Pimco saw its assets in Thailand drop 50% to THB 77bn compared to full year 2017.
Pimco offers a global bond fund – the GIS Income Fund – in Thailand via a feeder fund offered by TMB Asset Management. The locally-wrapped version, the Global Income Fund, was one of the top 10 best-selling newly-launched products in Asia-Pacific in 2017. However, it saw the largest outflows of around $1.39bn as of the end of July among the global bond category, according to Morningstar data.
Despite the bond fund outflows, Pimco continues to be the top feeder fund partner in the country. The firm is followed by Blackrock, which saw its assets grow 18% this year to THB 47bn because of its equity strategies, the report noted.
Largest master fund firms in Thailand (AUM in THB m as of 30 September)
Source: Morningstar
Equity funds lead
On the flipside, equity funds continue to dominate year-to-date inflows. Of the top 10 categories, six of them are foreign investment funds, led by property – indirect global, global equity and China equity funds, according to the report.
Source: Morningstar data
China equity funds have seen net inflows for eight consecutive months as investors shrugged off trade war tensions, the report noted.
Most country-focused foreign funds had net inflows during the year. The exception was US equity funds, with net outflows of around THB 2.84bn this year, according to data from Morningstar Direct.
India equity funds were the worst performer among country-focused equity funds, returning -15.32%, according to the report. But the category continued to see inflows of around THB 3.17bn, according to data from Morningstar Direct.
Top and bottom five foreign investment funds by net flows (YTD, THBm)
