Posted inFund Flows

Thailand funds suffer from global bond outflows

Market volatility caused decreases in net assets in almost all of the largest categories, Morningstar found.

Coupled with inflation and rising bond yields, most of the fixed income funds in Thailand posted a net outflow in the first quarter of 2022, according to Morningstar’s latest Thailand Fund Industry Review.

Foreign investment bond fix term product reported the largest amount of outflows, totalling THB43.3bn ($1.28bn), contributing to approximately half of the Thailand funds outflows of THB86.9bn.

Mid/long term bond, global bond, and short-term bond funds also suffered setbacks, with net outflows of THB12bn to THB17.9bn.

Mixed equity flows

Meanwhile, perceptions of equity funds were mixed, experiencing net inflows of THB3.8bn during the first three months of the year.

Equity large-cap funds was the asset class with the second most outflows during the quarter (THB20bn), and net assets dropped 1.7% quarter-over-quarter to THB628bn.

On the other hand, global, US and China equity products were among the top asset classes in terms of net inflows.

Global equity funds enjoyed the highest net inflows among foreign investment funds (THB12.1bn), followed by US equity funds (THB7.2bn).

Country focus equity products also reported THB7bn in net inflows, led by launched Vietnam equity funds.

Despite seeing another quarter of net inflows, China equity’s net assets decreased by 13.7% quarter-over-quarter due to an average return of -15.5%, according to the report.

During times of uncertainty, many investors flocked to money market funds.

The sector saw net inflows for the quarter at THB14.5bn, and a 2.3% increase in net asset value quarter-over-quarter.

Winners and losers

In general, the total net asset value, excluding closed-end, Reit, infrastructure, and ETFs, was THB4.1trn for the first three months of 2022, which was quite flat year-over-year, but a 4.2% decrease quarter-over-quarter.

Hindered by a large amount of outflows from fixed-income funds, SCBAM had the largest outflows of THB17.5bn among local asset managers, with THB1.1bn from bond funds.

Thailand’s largest manager, KAsset, also posted a net outflow of THB8.8bn, as its K Fixed Income fund had net outflows of THB8.7bn.

Thailand Fund Flows Q1 2022

Asset classNet inflow (THB bn)Asset classNet outflow (THB bn)
Money market+14.5Foreign investment bond fixed term-43.4
Global equity+12.1Equity large-cap-19.9
US equity+7.2Mid/long term bond-17.9
Country focus equity+7.0Global bond-14.7
China Equity+5.4Short term bond-12.0
Bond fix term+2.8Miscellaneous-6.5
Moderate allocation+1.2Conservative allocation-6.1
Indian equity+0.5Foreign investment miscellaneous-3.9
Global technology+0.5Commodities Precious Metals-2.7
Global allocation+0.4Europe equity-2.5
Source: Morningstar Direct. Data as of 31 March 2022

Part of the Mark Allen Group.