KSAM Urged Thai Investors to Seek Investment Opportunities Overseas through Foreign Investment Fund (FIF) Expressed Optimism in Growing Healthcare Sector, Emerging Asian Markets, and Recovering Japan

         Although the global economy is currently exhibiting dim prospects, many countries remain positive as signs of recovery begin to surface as a result of several economic stimulus initiatives undertaken across different markets. Now that the Thai economy is showing signs of instability which many believe to be temporary, Krungsri Asset Management Co., Ltd (KSAM) meanwhile recommends Thai investors to diversify their portfolio and distribute the risks by seeking investment opportunities through the Foreign Investment Fund (FIF) in order to increase revenues and returns on investment (ROI).

        In line with this, KSAM has recently organized a seminar “Krungsri Asset Management Global Fund Forum 2015 – Connecting a World of Investment Opportunities” at Siam Kempinski Bangkok Hotel, with expert fund managers from reputable global fund houses, such as J.P. Morgan Asset Management, Eastspring Investments and Schroder Investment Management, to provide updates on global economic trends and criteria on how each fund house evaluates assets for investment prospects. The seminar was aimed at providing guidelines for investors on how to make the right investment decisions. The three fund houses are all master funds carefully selected by KSAM so that Thai investors can wisely choose the fund that best corresponds to specific investment objectives and according to current global economic trends. The three selected funds include the J.P. Morgan Funds - Global Healthcare Fund, which Thai investors can avail through Krungsri Global Healthcare Equity Dividend Fund (KF-HEALTHD); the Eastspring Investments - Japan Dynamic Fund, which is focused on the Japan stock market and in which Thai investors can invest through Krungsri Japan Hedged Dividend Fund (KF-HJAPAND); and the Schroder Asian Income Fund, focuses on investments in quality stocks and fixed income from within the Asian region, so that investors can get returns as dividends and increase of fund prices and Thai investors can invest through Krungsri Asian Income Hedged Fund (KF-AINCOME).

         Elvina Lee, Client Portfolio Manager from J.P. Morgan Asset Management, stated that the healthcare sector is growing significantly in several regions around the world, especially in the United States, Europe, Japan as well as in Asia. As an example, she cited China that has put an emphasis on the healthcare industry and has regarded it as one of the top priorities in reforming the country. The major factors behind the growth of the healthcare sector include the growing aging population, which constitutes increased spending on healthcare services, as well as the ongoing dramatic changes in the overall healthcare industry propelled by advancements in medical technology that greatly help reduce time and cost in the invention of new medicines as well as in the provision of medical treatments and services. She also mentioned Genome Sequencing, a part of the study on human genetics, which enables drug companies to discover and create new medicines for rare types of disease. She cited further that the healthcare sector does not only have hospital business, but it also involves with many other businesses such as drug companies, medical technology companies and insurance business which are all adjusting their businesses to be in line with the industry changes. “Although the healthcare sector seems to have already reached its full maturity, there are still many companies that are still growing and they provide great opportunities for investment. J.P. Morgan Asset Management has taken a look at companies that have undergone business restructuring in order to cope with relevant changes in the industry, as well as those that had made breakthroughs in terms of medical innovation, technology and treatment that offer cost-effective investment opportunities,” Elvina said.

        Michael Wooley, Client Portfolio Manager from Eastspring Investments, said that at present, Japan is currently the country in Asia Pacific that has recorded the most remarkable growth. From being a low-yielding market for investors due to the sluggish economy, Japan has now become a vibrant and exciting market. Many Japanese companies have restructured their business in order to rise above the economic hurdles. As a result, businesses performed better and business revenues have gone up. One of the factors that has driven business growth in Japan is the Japan’s Pension Fund. Today in Japan, investing in the Fund helps gain income from investment. This is one of the factors that motivated Japanese companies to try to improve their business performances. He said this is still the right time to invest in Japan’s market as there are still a lot of companies that are performing well, can make good profits, but remain cheap. Furthermore, the Eastspring Investments also has a strict process in selecting assets for investment. Instead of riding the bandwagon, Eastspring Investments focuses on assets that may have been overlooked in the market and so still carry low price tags. After which, it carefully evaluates each asset before making any investment, in order to determine profit generating potentials and sustainable and long term growth prospects. This way, investors are assured and can invest with more confidence.

        Pang Kin Weng, Fund Manager from Schroder Investment Management, explained about Asia as the emerging market with the highest growth potential as compared to other emerging markets in other regions. This is due to urbanization and industrialization that continue to drive economic growth in the region. Because of this, there are plenty of investment opportunities for long term income and profit generation. The Schroder Asian Income Fund focuses on investing in companies that possess high growth potentials based on good corporate governance, in regional properties through REITS, and those with good quality fixed income. However, there are still some risks looming in the Asian market due to the increase interest rates in the US as part of its economic recovery measures. This means that operating costs of companies with foreign loans are more likely to have an upswing. The increase in interest rates, however, is gradual, which means more time for companies to readjust. Meanwhile, the fund tries to be flexible in managing portfolio and manage exchange rate risks to ensure more favorable profit prospects for investors.

        Meanwhile, Mrs. Supaporn Leenabanchong, KSAM’s Acting Chief Investment Officer, said at the seminar that although Thai stock market is still competitive when compared to neighboring countries like the Philippines and Indonesia, with a P/E ratio at 13.7 times, it still contains many risks such as the sluggish growth of export volumes and the decrease of GDP as announced by the government. Because of this, investors are urged to closely monitor the country’s economy in the second half of the year. She advised Thai investors to distribute the risks by investing in FIF.

         “KSAM has carefully selected the world’s leading FIF for Thai investors by Morningstar’s Qualitative and Quantitative Screening. We also consider the risks and market fluctuation that we think is most appropriate for the Thai investors. Each fund will be carefully selected by our own specialist team together with the experts from these world’s leading fund houses to create confidence among Thai investors as much as possible,” Mrs. Supaporn explained.

        Mrs. Supaporn pointed out the proper allocation of assets in this situation is to invest 25% in Thai stock market, 21% in developed markets, 9% in emerging markets, 27.5% in fixed income, 12.5% in global bond fund and 5% in gold fund. At present, KSAM has a wide choice of FIF covering all types of assets from around the world, enabling investors to get more investment opportunities and gain more returns on investment.

Disclaimers
1. Investment contains risks. Investors must study and understand the nature of the products, conditions of return, and risks before making investment decision.
2. Past performance is not a guarantee of future results.
3. KF-AINCOME, KF-HJAPAND, and KF-HEALTHD primarily invest in foreign equities. Therefore, the Fund may have risks from economic and/or political and/or social changes in the country where the master funds invested in.
4. For the funds with dividend payment policy, return payment is based on Master Funds’ performance and Fund Managers’ consideration.
5. KF-AINCOME and KF-HJAPAND will enter into a forward contract to hedge against the exchange rate risk in Baht equivalent at a particular time for the value of at least 90% of the foreign investment value, in which case, may incur costs for risk hedging transaction and the increased costs may reduce overall return .
6. KF-HEALTHD may contain foreign exchange risk. The Funds may enter into a currency swap within discretion of fund manager which may incur transaction costs that may reduce overall return.
7. KF-AINCOME may invest in unrated or non-investment grade debt securities at the higher ratio than those of other mutual funds, therefore, in which case, the investors may be exposed to the issuer’s default risk, credit risk and liquidity risk than other mutual funds.
8. KF-AINCOME are suitable only for accredited investors and high net worth individuals.

To request more information and a prospectus:
• Krungsri Asset Management Company Limited | Tel. 0 2657 5757
• Bank of Ayudhya Public Company Limited
• Selling and Redemption Agents

Remark: Bank of Ayudhya Public Company Limited simply acts as a distributor of investment units on behalf of Krungsri Asset Management Co., Ltd.