Financial markets/Financial markets : Mutual Funds

Overview

• Mutual funds are investment vehicles for retail investors investing in financial markets. In the past, mutual funds largely responded to investors interested in financial markets, but were impeded by a lack of investment expertise, or a lack of time needed to follow market movements, or other factors. Now, with the government and private sector disseminating knowledge about investment matters, mutual fund investments have become more accessible as an important option for Thai investors. Therefore, they will be significant in driving Thai financial markets.

• In recent years, investors have viewed mutual funds with greater interest as an investment option, thanks to the government and private sector for continually disseminating information to investors about such matters, especially those who do not have the investment expertise to gauge such assets. For such persons, it may be better to have one's investments managed by a fund manager, where they compare expected returns, and match them to risk appetites.

• Mutual funds are commonly categorized by their investment policies, or by special features. By investment policy, there are five major categories, i.e., equity funds, fixed income funds, mixed funds, property funds (types 1-4) and others. As of July 29, 2012, fixed income funds held the largest market share, accounting for 61.79 percent of the mutual fund NAV. Special features that may be noted include seven categories, i.e., retirement mutual funds (RMFs), long-term equity funds (LTFs), foreign investment funds (FIFs), exchange traded funds (ETFs), money market funds, property funds (type 1) and others . Excluding other funds, FIFs held the largest market share (20.71 percent), mostly investing in debt instruments.