By the end of 2019, growth in the Thai economy is forecast to reach 3.8 percent, down from the 4.2 percent recorded in 2018 (see Fig 1). Fortunately, this looks more like a blip than a long-term downward trend. Ironically, the very trade tensions that have contributed to the global economic slowdown that is harming Thailand’s economy could result in an upturn in 2020.
US tariffs, for example, have seen South-East Asian countries looking to lure investment away from China. According to the Office of the National Economic and Social Development Council, as many as 10 firms are already looking to relocate production from China to Thailand. This, alongside an influx of foreign direct investment, could see Thailand return to higher levels of growth next year. For investors looking to contribute to this growth, UOB Asset Management (Thailand) (UOBAM (Thailand)) can provide the expertise and knowledge needed to ensure positive returns. World Finance spoke with Vana Bulbon, the firm’s CEO, about Thailand’s investment climate and how it has developed over the past few years.
By treating sustainability as a critical factor, UOBAM (Thailand) places investments in a position to generate strong returns
What is the investment landscape currently like in Thailand?
Fixed income products are more common for investors in Thailand than they are in other countries. Because of sustained low interest rates, money market funds have become a favoured substitute for traditional savings accounts. In recent years, as Thai investors have become more knowledgeable, they have begun utilising multi-asset income and equity mutual funds as well as private funds as investment vehicles. Asset allocation and regular savings plans have become accepted as the general path towards building wealth and, for many, a way of planning for their retirement.
The Stock Exchange of Thailand and the asset management industry have also been active in educating the public on the merits of financial planning through regular events. At the same time, the Bank of Thailand has continued to relax regulations, allowing asset managers to market foreign investment funds to retail investors. Additionally, high-net-worth individuals are able to directly invest in foreign assets more conveniently.
Aside from private funds, what investment platforms does UOBAM (Thailand) offer?
As well as private funds and segregated mandates, UOBAM (Thailand) offers mutual funds and provident funds (defined contribution plans). Our services cover a spectrum of asset classes, including fixed income, multi-asset, equity and alternatives, such as real assets and private equity strategies. Through these platforms, UOBAM (Thailand) is able to serve individuals and juristic entities, including intermediaries and government agencies.
Private funds or segregated accounts offer unparalleled flexibility in comparison with mutual funds. Investors are able to mandate specific asset classes, the proportion of each asset class, and qualitative measures such as credit ratings and corporate governance ratings. Additionally, investors may change their mandate as market sentiments shift and benefit from being able to dynamically position their portfolio in a fluid environment.
Why should clients choose UOBAM (Thailand) over other private investment management services?
UOBAM (Thailand) believes the market to be inefficient, meaning there is alpha to be earned through active investment strategies. We are able to provide such strategies for our investors through our people and processes. Our people are experienced investment professionals who have been through multiple economic cycles, not just uptrends and downtrends, conducting their work through a process that is focused on maximising returns within the accepted risk tolerance of the investors.
As a subsidiary of UOBAM (Singapore), we are able to draw on our parent company’s regional strength, a benefit that directly contributes to the performance of our foreign
What types of assets are invested via the UOBAM private fund and what are their advantages?
Currently, our private funds cover a wide range of asset classes, each with its own characteristics. Starting from the lower end of the risk spectrum, fixed income instruments have the potential to generate income, mitigate downside risk and diversify a portfolio. They are favoured by investors prioritising capital preservation.
For multi-asset funds, we offer a broad range of investment options including absolute return, income and life cycle. For longer-term horizons, equity options that offer high levels of expected returns are available for those able to tolerate the possibility of capital loss.
Finally, investors can opt for funds that provide exposure to both alternative and inflation-sensitive assets and private investments in late-stage growth companies. This array of choices and capabilities allows us to meet the varied needs of our clients. On the whole, it is important to understand the characteristics and correlation of returns for each asset class in order to formulate a portfolio that is suitable to the investor’s risk tolerance. Furthermore, through active management of the portfolio, our fund managers can exploit the advantages of each asset class to generate returns regardless of market conditions.
What sort of clients do you serve generally?
UOBAM (Thailand) serves both institutional and individual investors. Within the institutional segment, our clients include private and public companies across a range of industries, endowments, foundations and insurers, as well as family offices. Within the individual segment, we serve retail investors and, through our private wealth department, high-net-worth investors are specifically catered for.
With our customer-centric approach, it is easy for a prospective client to learn about our services and open an account with us. Through our dedicated call centre, interested parties can contact our wealth service team and direct their enquiries to one of our highly trained advisors. Prospective clients interested in private funds will be directed to our private wealth department. Our relationship managers are able to meet with prospective clients to discuss their specific needs and assist them with account opening. Going forward, we aim to allow potential clients to complete the entire process electronically. In our view, that is the direction the account-opening process is travelling in with regard to the industry as a whole.
To what extent have digital technologies changed the private investment landscape in Thailand in recent years?
UOBAM (Thailand) recognises that the financial industry has been disrupted and, more importantly, will continue to be disrupted by technological changes. As such, we have developed an award-winning wealth management platform known as UOBAM Invest, which allows investors to monitor and manage their portfolios. The programme earned the title of Best Wealth Management Platform at Asia Asset Management’s 2019 Best of the Best Awards. UOBAM Invest is continually being monitored and improved to ensure it helps investors achieve their investment goals in a user-friendly manner.
With our customer-centric approach, it is easy for a prospective client to learn about our services and open an account with us
From a fund management perspective, we will continue to enhance our investment tools, using big data to evaluate stock prices, earnings and analyst recommendations in order to assess material shifts in the market. Again, the ultimate objective is to allow our fund managers to optimise their time and performance.
We are also keeping a close eye on the industry-changing implications of the growing fintech sector. Newly introduced or updated applications will ensure that investors have the best tools at their disposal. All asset management companies, including UOBAM (Thailand), continually optimise their platforms to achieve greater investor satisfaction.
How important is sustainability for UOBAM (Thailand) when managing investments?
Sustainability is a critical factor for us in managing investments. On June 14, 2017, UOBAM (Thailand) formally adopted the Investment Governance Code for Institutional Investors. In line with this code, our investment decisions will continue to be guided by professionals acting with the utmost integrity, free from insider information and corruption. This safeguards the company and the wider industry from involvement in the money-laundering process.
Also of significance is the inclusion of an environmental, social and governance framework in security selections. Each factor of this framework is given a value and each security is scored accordingly: negative, neutral or positive. By treating sustainability as a critical factor, UOBAM (Thailand) places investments in a position to generate strong returns.
What does the future of investing in Thailand look like and what role will UOBAM (Thailand) play within that?
Similar to other industries, the future of investing in Thailand will be defined by an increasingly sophisticated investor audience and a backdrop of technological innovation and disruption.
To prepare for the next generation of investors, UOBAM (Thailand) intends to enhance its existing products, platforms and services to stay ahead of the curve. Every decision the business makes will work towards bringing our customers the most seamless service and the best returns on investment.