Feb. 12--Thai investors are advised to allocate 30% of their portfolio to international investment, with Europe and East Asia the main destinations amid mounting political uncertainty at home, says TMB Asset Management (TMBAM).
"Europe is the most attractive area drawing fund inflows since last year, while the US market is declining at the moment," said chief executive Somjin Sornpaisarn yesterday.
"With Thailand's political crisis expected to be prolonged in coming months, it is likely the local market will continue to be highly volatile at least for six months. So investors should diversify risk to international assets with 30% of assets."
Like other emerging markets, Thailand is reeling from the exodus of capital outflows following the US Federal Reserve's tapering and currency problems in some markets. Domestic political strife has also taken a toll on the Thai stock market.
TMBAM launched the European Trigger Growth Fund, a global equity fund, with an projected 5% return in five months, on the expectation that European countries will show a fast recovery this year.
The fund, with an initial public offering (IPO) from Feb 17-21, will invest in Franklin European Growth Fund, which has historical returns that beat its market benchmark the past six years.
The fund received the highest overall rating last year by Morningstar and Lipper for total return, consistent return and preservation, and had a return of 25.7% in euro-denominated currency terms last year.
One Asset Management is also jumping on the European bandwagon, starting the European Equities Fund with an IPO this week, aiming for a 12% return in 12 months.
Tor Indhavivadha, the chief executive of Manulife Asset Management (Thailand), said Thai equities are experiencing rising volatility and local investors could benefit from offshore investments to spread the risk.
The broader Asian market also offers opportunities to diversify, lowering risk while delivering attractive returns, he said, noting that East Asia is a focus, as these countries could take advantage of the global trade pickup.
Separately, the EU has turned around from its recession and could become an attractive destination for investment if its growth momentum continues, he said.
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