The total net asset value of the Thai fund industry topped THB 5.2trn ($1.7bn) at the end of March, up 13.5% year-on-year, boosted by net inflows of THB 33.4bn in the first quarter of the year, Morningstar data shows.
The direction of flows reversed last year’s trend, when there were total net outflows of THB 276.3bn, a decline of 7.3% from 2019, as investors deserted fixed income and (balanced) allocation funds during most of the year.
However, all of the top 10 inflows in the first quarter of 2021 were into foreign investment fund (FIF) categories – almost entirely equities – while domestic investment categories experienced the biggest net outflows.
The size of equity FIFs has increased significantly during the past few quarters, hitting THB 627bn, compared with Thai domestic equity funds’ value of THB 749 billion, according to Morningstar.
“Almost all of the asset managers in Thailand had robust growth in FIF year-over-year, especially small- and mid-sized firms, most of whose AUM grew at least 100%,” said Chayanee Juengmanon, senior research analyst, Morningstar Research (Thailand).
OneAM enjoyed a whopping 749% increase in the first quarter, with THB 24bn of flows into high return products and so-called trigger funds, a market-timing product that is liquidated by the manager when a previously specified target return is achieved.
Krung Thai Asset Management (KTAM) move two positions up the FIF rankings largely as the result of a 200% increase in flows to its China equity (KT-A Shares) and Asia Pacific ex-Japan (KT-ASIAG) funds. KATM was the winner of FSA‘s inaugural award for Thailand’s best equity asset manager this year.
The total net asset value of FIFs (excluding fixed-term funds) was THB 984bn, up 17% from December 2020, with net inflows of THB 152bn, of which all but THB 1bn was into equity products.
Meanwhile, rising US bond yields prompted net outflows of THB 12bn from international fixed income funds.
In contrast, China equity funds were especially popular, with THB 55bn of inflows in the first quarter of the year; more than half of flows went into funds provided by KTAM and KAsset.
Global equity funds ranked second with THB 44bn of inflows, and major attractions were innovation and ESG-related funds launched this year or in 2020, according to Morningstar.
“China equity and global equity have been growing in popularity, with growth rates of around 300% year-over-year,” said Juengmanon.
All of the Top 10 Inflows Are Foreign Investment Categories
|Inflows||THB bn||Outflows||THB bn|
|China equity||54.6||Bond fix term||-6.4|
|Global equity||43.7||Global allocation||-7.5|
|Foreign inv. misc.||21.7||Short term bond||-8.5|
|Global healthcare||18.2||Global bond||-11.7|
|Foreign bond fixed-term||17.3||Moderate allocation||-11.8|
|Global sector focus equity||16.8||Mid/long term bond||-13.7|
|AP ex-Japan equity||11.8||Property – flexible||-15.9|
|Global technology||9.6||Conservative allocation||-15.9|
|US equity||5.9||Equity large-cap||-18.5|
|Europe equity||3.7||Money market||-54.9|
Domestic asset categories were significantly less popular.
Large-cap Thai equities, short-term bonds and money market funds suffered the highest outflows during the first quarter, according to Morningstar.
Nevertheless, the total net asset value of Thailand equity funds (excluding retirement and tax-exempt products) increased 5% between 31 December 2020 and 31 March 2021 to THB 239bn, as net outflows were more than countered by rising stock prices.
Money market funds saw the largest net outflows, THB 54.9bn, which caused their aggregate net asset value to drop by 7.3%.