Fund bosses reveal their strategies which all emphasis looking
at the long-term
High inflation, domestic political tension and a global
economic slowdown are challenges for all fund managers. Their tactics in
managing people's portfolios to overcome these problems can serve as an
interesting lesson for ordinary investors.
The average inflation rate is expected to be about 8 per cent
this year, and there will be little surprise if it reaches double-digit
figures this month or next. It already reached a 10-year high of 8.9 per
cent last month, and its constant rise makes it increasingly difficult
for fund managers to beat in terms of return on investment.
Domestic political tensions still linger, hammering away at
investment sentiment, while the global economic slowdown and the credit
crunch have cast a dulling pall over the entire capital market.
In these circumstances, it is interesting to learn how fund
managers manage their own investment portfolios and how they recommend
we look after ours. Three fund managers have revealed their strategies
to The Nation.
Voravan Tarapoom, managing director of BBL Asset Management,
said despite current uncertainties, she had not changed much about her
personal investment portfolio.
Generally, she allocates a third of her monthly income to
investment. Last month, she invested in a gold fund, a retirement mutual
fund and a long-term investment fund - up to the limit for tax benefits.
If all of the negative factors continue, she will switch to
fixed-income funds in both local and foreign markets and the gold fund.
Voravan's portfolio consists of both low- and high-risk assets
in a 60:40 proportion. The low-risk assets include fixed-income and gold
funds, while high-risk assets include stocks in local and foreign
markets in a 75:25 proportion. She regards her investment portfolio as
financial preparation for her retirement.
"When interest rates are on the rise and the stock market
plummets, it's not surprising to see people dumping stocks. But you
should not dump all of your stocks, and those with limited savings for
retirement should not invest in stocks. Fixed-income assets are a better
choice," she said.
Prapas Tonpibulsak, chief investment officer at Ayudhya
Fund Management, said he focused his personal portfolio on the
stock market and planned to make it a long-term investment for his
retirement.
"I believe the stocks in which I've invested will be able to
survive the current economic crisis. I have invested mainly in stocks
with good fundamentals and have not focused only on some particular
groups of stocks," he said.
Despite current stock-market volatility, good stocks with high
potential will still provide significant gains, he said.
Prapas admitted he had made his personal portfolio resemble
Ayudhya Fund Management's investment portfolio. He focuses mainly on
energy stocks in the belief there will be significant demand for energy
in the future despite efforts to find alternative sources.
He also invests in telecom stocks, because he believes the new
third-generation mobile-phone technology will generate significant
future incomes for operators.
Darabusp Pabhapote, executive vice president of Krung Thai
Asset Management, recommended investors allocate 20-40 per cent of their
investments to money-market funds, most of which generated rates of
return higher than most fixed-deposit rates. Investors are also able to
shift their money from money-market funds to other types of funds as
they wish.
However, she advises investors against placing all of their
money in money-market funds, because despite their ability to surpass
fixed-deposit rates, their return is still not high enough to beat
inflation.
She said investors should place an additional 10-20 per cent
of their money in short-term fixed-income investments like one- or
two-year bonds, which would help boost overall returns above those from
money-market funds.
Moreover, investors should also allocate money to stocks,
commodities and real estate in the proportions of 20-40 per cent, 10 per
cent and 10-20 per cent, respectively.
Despite the stock market having been affected by high
inflation and high interest rates, stocks will help retain investors'
spending power in the long term, and commodity and real-estate
alternative investments will help cover inflation risks, because their
prices generally adjust in accordance with the inflation rate.
-nation