Thailand funds boosted by economic recovery

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Thailand single-country equity products have posted strong long-term returns as the country now awaits the result of political horse-trading.

Thailand’s first democratically-elected parliament since the 2014 coup is set to open next week, although it is unclear who will take executive control as rival parties haggle for alliances.

The pro-junta Palang Pracharat party secured the most seats in the legislature following the March election, but opposition groups might forge a coalition under the Democratic Front to prevent military chief Prayuth Chan-ocha becoming prime minister, according to Bloomberg reports.
While Thailand’s political future remains in flux, the country’s economy has been strong. GDP grew 4.1% last year, rising 3.7% in the final quarter, up from a revised 3.2% in the third quarter, and beating expectations on higher domestic demand and growing tourism, according to the IMF.

The stronger economy last year reflects an upward trajectory since the coup prompted a sharp downturn. GDP growth was 1% in 2014, 3% in 2015, 3.3% in 2016 and 4% in 2017.

Share prices have followed that economic recovery, and Thai single-country mutual funds have earned solid three-year cumulative returns. Although, the best of them have not performed as well as the best China or India  funds, they stand out among other single-country funds in the region.

Six out of the top eight actively-managed funds are Thailand-focused, according to FE Analytics data.

They are led by funds managed by Templeton (52.09%), JP Morgan (46.87%) and Amundi (44.78%).

But only the Templeton fund managed to beat the MSCI Thailand Index.

In contrast, the worst performing funds over three years are concentrated on the Philippines and Indonesia, managed by JP Morgan (-6.32%) and Parvest (-3.13%), respectively, according to FE Analytics data.


Best performing Thailand single-country funds

Fund

3-year annual return %

3-year annual volatilityInformation ratio

Alpha

Templeton Thailand

15.29

12.330.88

10.19

JP Morgan Thailand

14.60

13.030.91

8.35

Amundi Equity Thailand

13.21

12.490.78

7.29

MSCI Thailand

14.62

12.82

Asia-Pacific (ex-Asean and Australia) single country average

6.32

10.06

Source: FE Analytics. Data in US dollars, 21 May 2016 – 17 May 2019

Top 3 Thailand funds vs Asia Pacific (Asean and Australia only) single-country fund sector average

Source: FE Analytics. Three-year cumulative performance in US dollars. MSCI Thailand index is benchmark for Templeton and JP Morgan funds only.

 

 

 

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