July 07--Despite unfavourable market conditions from the political impasse in the first five months of this year, the mutual fund industry's assets under management (AUM) expanded 17% thanks to low interest rates.
They surged 500 billion baht from the end of last year, said UOB Asset Management (UOBAM) chief executive Vana Bulbon. Of that figure, 60% was in money market and fixed income funds while 40% was in equity, property and other funds.
According to the Association of Investment Management Companies, total AUM amounted to 4.77 trillion baht, with 3.5 trillion for mutual funds, 490 billion for private funds and 780 billion for provident funds.
"Since early this year, there have been no new special deposit interest rates from banks, even among small and medium-sized banks, unlike in previous years," said Mr Vana.
"This reflects that banks are not lending due to uncertainties over economic growth in the first half of the year. Money flowed into money market funds and others."
The Bank of Thailand last month kept the benchmark rate on hold at 2% for a second straight meeting, saying the rate accommodates economic growth, while economists predict the rate is likely to be nudged up next year following improving economic sentiment on expectations that massive investment in infrastructure developments will be kick-started.
"2014 could be another golden year for the mutual fund industry," said Mr Vana.
UOBAM's AUM increased to 245 billion baht in May from 217 billion at the end of last year. Growth in assets was seen across the board. AUM of its mutual funds rose to 117 billion baht from 106 billion, provident funds by 15% to 74 billion, and private funds rose 12% to 53 billion.
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