The majority of investors in Thailand prefer mutual funds and deposits as their investment vehicles, according to SCB Julius Bar Wealth Report Thailand 2019. More than 60% of assets under management (AUM) in the country are in mutual funds (37%) and deposits (25%).
Popular Investment Products
- The assets under management in the mutual fund industry grew at CAGR 59% from THB 3.08 trillion ($102.9 billion) in 2013 to THB 4.91 trillion ($164.1 billion) in 2017.
- The industry is forecast to grow at a significant pace due to the newly established ASEAN Collective Investment Scheme (CIS), further liberalization of capital markets, and "the increased demand for managed high-return investments for retirement as the Thai population ages."
- There's diversity in the asset types under mutual funds as favored by Thai consumers. The asset types include fixed income funds, equity funds, balanced funds, property-REIT, and infrastructure funds.
- The majority of Thai consumers prefer fixed income funds, which hold the largest market share of 49%. In 2019, the AUM of fixed income funds was THB 2,588 billion ($864 million).
- Local Thai banks manage 94% of the fixed income funds "which are the majority of the mutual funds," non-Thai banks and foreign banks manage about 2% and 4%, respectively of the fixed income funds.
- The AUM of the equity funds was THB 1,467 billion ($490 million) in 2019. However, between 2007 and 2019, equity grew by 21%, faster than fixed income, which only rose by 8.5%.
- Balanced assets grew from THB 89 billion in 2013 to THB 352 billion in 2018, experiencing 32% growth during that period.
- Property-REIT and infrastructure funds both "account for 13% of overall Thai mutual fund assets in 2018."
- Brand reputation and strong distribution channels are the main growth factors in Thai's mutual fund industry.
- There are a wide variety of deposit products -from checking to savings accounts, and fixed deposits with attractive interest rates.
- Bank depositors in Thailand are covered by the Deposit Protection Agency (DPA).
- According to DPA director Mr. Songphol Chivapanyarote, "there is 129.969 billion baht in the DPA’s fund, with about two billion baht in interest earned, on investments in Government and Bank of Thailand bonds, and 1.4 billion baht from financial institutions."
- There were $516.093 billion financial system deposits in Thailand by November 2020, according to CEIC Data.
- More than 50% of the total system deposits in Thailand are by high net worth individuals.
- Nearly 45% of the total system deposits are made by the middle class, while less than 5% are by the bottom 98%.
- In Thailand, "interest earned on saving deposits with a bank is exempt from tax if the interest is below the maximum limit of THB20,000 ($668) per annum."
- Additionally, "interest earned from a fixed deposit for a period of one year or more with a bank in Thailand is exempt income for an individual who is 55 years old or more if the aggregate interest earned throughout the year from all types of fixed deposits does not exceed the maximum limit of THB30,000 ($1,002)."
- Most investors in Thailand prefer fixed deposits due to sustained low interest rates.
Popular Investment Platforms
- Robowealth's Odini is an investment platform that is intentionally designed for Thai people to provide an automated mutual fund investment service.
- It is Thailand’s 1st robo-advisor platform "providing both asset allocation and mutual funds selection with automatic execution."
- The platform has about 200,000 members and manages nearly AUM of $300 million.
- Odini is recommended by Thai's Securities and Exchange Commission (SEC) and the National Innovation Agency of Thailand.
- The platform allows users to start investing in mutual funds with just 1,000 Baht.
- The company recently received a Series A investment of 30 Billion Thai Baht from Beacon VC.
- Finnomena’s Nter is an investment platform for Thai investors. It is designed to "Take care of and advise the investment of people" by helping to monitor continuously.
- The platform manages more than 2 billion baht in AUM and has more than 12,000 registered members.
- It eyes $3 billion in AUM by 2023.
- Return on mutual fund investment averages between 6%-12% per annum "depending on the risk-reward ratio."
- Nter's average target age is 33 years with an average monthly income of about 50,000 baht.
- The company has raised $3.2 million and $13.5 million in Series A and B, respectively.