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Published on December 12, 2007

Shunning the release of yet another six-month short-term bond fund of the type now proliferating, Picha Ratanatam, head of investment management for mutual and private funds, said the Bt1-billion Tisco China India RMF would quench the thirst for growth, because consumers no longer saw retirement funds solely as a tax-saving vehicle.

However, unlike the majority of recently emerged market funds, Tisco has chosen not to pick the stocks or master funds itself, preferring instead to take a sweeping macroeconomic view of things. The four exchange-traded funds (ETFs) in which the new RMF will invest all have less than 1-per-cent annual tracking errors from such benchmarks as the MSCI China, Hang Seng China Enterprise and MSCI India indexes. Two of the ETFs trade on the Hong Kong Stock Exchange and two on the Singapore Exchange.

"The majority of our customers are more concerned about the big picture," Picha said.

Tisco's clientele consists mainly of middle- to high-net-worth individuals. Although the fund does not rule out investing in foreign feeder funds, he said such a move towards actively managed funds was highly unlikely, at least in the next three years.

Tisco's previous venture into Chinese and Indian equities was warmly received. The Tisco China India Dividend Fund, which had a Bt1-billion initial public offering in October, has grown in net asset value to Bt1.4 billion.

Foreign investment funds continue to drive the company's total volume of assets under management at a growth rate of 375 per cent year on year, said Theeranat Rujimethapass, head of mutual fund and private fund business. "We shall continue to play on the geographical theme next year," he said, noting the ill fate of some segment-driven funds, particularly those investing in technology and electronics.

Tisco's asset-management team continues on its conservative path, with another government treasury-bond fund from yet another G-7 country, all of which should have a triple-A rating.

The company has been abstaining from short-term bond funds. Theeranat believes that without an extensive distribution network like a large bank as a parent company, the gain is not worth the pain.

Ki Nan Tsui

 The Nation