The total net asset value of foreign investment funds (FIFs) sold to Thailand’s domestic investor base increased 2.3% year-to-date in Thai baht terms, according to Morningstar’s recent report on the Thai fund industry.
Excluding fixed term funds, FIFs in total had assets of $18.4bn (THB 585.6bn).
Although the global allocation category had a drop in assets, it continued to lead FIFs with THB121.8b, the report said.
Equity products continued to grow, led by global equity (13.5%), China equity (10.3%) and property – indirect global (5.7%).
Investment through master feeder funds, which are foreign funds sold through a master agent in Thailand, had a 1.1% increase in NAV during the first quarter, reaching THB400bn. Equity funds continued to be the major asset class, at 59% of the master feeder market.
Pimco has been the top foreign manager using a master agent. However, in Q1 Pimco’s marketshare continued to drop with total net assets down (-4.8%) year-to-date.
Blackrock’s assets increased marginally and UOB’s assets were up 9%. UOB replaced Deutsche, which had ranked number five the previous quarter, Morningstar noted.
Overall, Thailand’s mutual fund industry, (excluding close-end, Reits, Infra and ETFs) was up 3.5% in Q1, representing THB5.2trn, the report said.
During the quarter, Thai investors went back into fixed income. Morningstar noted that in the first quarter, investors switched to fixed income funds “after six consecutive quarters of net inflow coming mostly from equity funds”.
New fund launches
In Q1, 30 funds were launched in Thailand and cumulatively they gathered THB19.4bn ($610m) net inflow.
Ten of the new funds were in Morningstar’s aggressive allocation category and accounted for about half the total inflow.
Among equity funds, the TMB Eastspring Asia Pacific Property Fund had the highest inflow — THB4.9bn.
ESG assets
The report also highlighted that total net assets of ESG funds continued to grow in Thailand, reaching THB15.7bn at the end of March. At the end of 2017, assets were THB14.4bn.
Of the 17 funds distributed in Thailand with the ESG (or corporate governance) label, 10 ranked the highest – 5 globes – on Morningstar’s sustainability rating scale.
“The growing size of corporate governance or ESG funds is a good sign of the market’s higher awareness of sustainability investing, similar to the global trend,” the report said.
