Ktam's sterling fund to be the first of many

KTAM's Sterling Fund is a feeder fund invested in the Global Treasury Funds - Sterling Fund.

"We would like to launch more funds in other major currencies in the next few months, including US dollar, euro and Australian dollar denominations. This will provide even more choices for investors in selecting the asset to match their liability, as well as achieving their long-term investment goals," said Darabusp Pabhapote, KTAM's executive vice president.

"It won't take investors long to learn about the risks and rewards of foreign-currency products, because the opportunity is, frankly … huge." she said.

The Sterling Fund is managed by RBS Asset Management, a unit of the UK-based Royal Bank of Scotland.

The fund was established to offer more choices for retail and high-net-worth investors to enable them to better diversify their assets, as well as to hedge their currency liabilities, Darabusp said.

The frequency of foreign-exchange dealing is daily, with the settlement cycle being a mere two business days after the trade is executed.

"Investors are no longer required to transfer their money to offshore bank accounts, which normally incurs high transaction costs," she added.

Before the fund launch, investors in Thailand had to

transfer their money to an off-shore bank account or keep it in

a foreign-currency deposit ac-count with an onshore commer-cial bank. The foreign-currency deposit rate is normally lower than that of a money-market fund denominated in the same currency, and also subject to 15-per-cent withholding tax.

Investment returns from KTAM's Sterling Fund are not subject to withholding tax and are also exempt from individual income tax.

The Global Treasury Funds - Sterling Fund, the master fund of KTAM's Sterling Fund, has received top-notch ratings from the three major credit rating agencies - Standard & Poor's (AAAm), Moody's Investors Service (Aaa/MR1+) and Fitch (AAA/V1+).

She said that as the feeder fund in Thailand, however, is not hedged and as the underlying currency is pounds sterling, then the invested amount when converted into baht would depend on the currency movement between sterling and the baht.

KTAM had assets of about Bt200 billion under its management as of May 30, including its Bt73-billion national investment fund, Vayupak Fund 1.