Moobin
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Post by Moobin on Jun 10, 2021 12:54:20 GMT 7
I have just learned that Bangkok Bank is introducing a new mutual fund called B-Fintech (opening 10 to 16 June). Not having invested in this field before, I wondered if any of you guys have anything to say on this. The main fund is Blackrock BGF FinTech Fund. There does not seem to be much overlap with B-Innotech in which I am already invested, and I do not hold any mutual funds specifically in the financial sector. Or am I too late as it already seems to have taken off.
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AyG
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Post by AyG on Jun 10, 2021 14:03:02 GMT 7
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Moobin
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Post by Moobin on Jun 10, 2021 15:13:33 GMT 7
A lot of the funds in Thailand have high charges, especially when compared to overseas based funds. It is something I have grown to accept as all my money is in Thailand and it may not be worth my while to try to offshore some money to invest only to then bring it back in when I cash out. I have done pretty well with B-Innotech though. I am at 77% up on my initial investment. Probably be hurt when I cash out though.
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AyG
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Post by AyG on Jun 10, 2021 17:37:21 GMT 7
For various reasons I own four Thai funds. Their 3-year annualised performances are: 0.69%, 0.17%, -1.97% and 16.47%. In three out of four cases the fund manager has made far more money out of my investment than I have - and that's without fees at the 2.4% level.
As for FIFs in Thailand, they typically invest in funds which have had a strong run of performance before they are issued. That performance, pretty much invariably, then drops. Even a novice investor should know that one should understand why a fund has performed well, and consider whether that performance is likely to continue, and yet asset managers are failing to do that for the sake of headline catching historical performance figures at launch.
Of course, you're in a different situation from me since the bulk of my wealth and income are offshore already. I suspect, however, that in yours shoes I might consider investing overseas, rather than locally: Thai fund charges compounded over years quickly mount up, and I wouldn't stay that local fund managers are typically particularly great.
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Moobin
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Post by Moobin on Jun 15, 2021 19:31:27 GMT 7
For various reasons I own four Thai funds. Their 3-year annualised performances are: 0.69%, 0.17%, -1.97% and 16.47%. In three out of four cases the fund manager has made far more money out of my investment than I have - and that's without fees at the 2.4% level. As for FIFs in Thailand, they typically invest in funds which have had a strong run of performance before they are issued. That performance, pretty much invariably, then drops. Even a novice investor should know that one should understand why a fund has performed well, and consider whether that performance is likely to continue, and yet asset managers are failing to do that for the sake of headline catching historical performance figures at launch. Of course, you're in a different situation from me since the bulk of my wealth and income are offshore already. I suspect, however, that in yours shoes I might consider investing overseas, rather than locally: Thai fund charges compounded over years quickly mount up, and I wouldn't stay that local fund managers are typically particularly great. BLS are pushing another fund now, BCAP-CLEAN. And exactly as you say, they are pushing it now it's short term performance has been very good. But to me it seems a bit late. Had they gone with an IPO 12 months ago and not at the end of this month, investors could have probably made some money. I would be hesitant to enter at the moment (I haven't checked the ETFs which this fund will buy into yet).
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AyG
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Post by AyG on Jun 16, 2021 19:29:46 GMT 7
I've just had a look at BCAP-CLEAN and it's worse than I'd expected. I'd assumed this was going to be another wrap of a foreign fund with very good recent performance. It's not. In fact it's the sort of fund I could set up pretty easily:
Step 1: pick a trendy key term such as "ESG", "biotechnology" or, in this case "Clean".
Step 2: identify all ETFs that have that term in their name.
Step 3: Rank those ETFs by performance over the last year or two.
Step 4: Include only the top performers in your new fund.
Step 5: Calculate the overall performance as if you'd had the magical hindsight to buy those funds a year or two ago to dupe impress would be investors.
Never is the warning "past performance is no guarantee of future results" more warranted. For me there isn't a bargepole long enough for me to touch this fund.
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Moobin
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Post by Moobin on Jun 16, 2021 20:01:18 GMT 7
I've just had a look at BCAP-CLEAN and it's worse than I'd expected. I'd assumed this was going to be another wrap of a foreign fund with very good recent performance. It's not. In fact it's the sort of fund I could set up pretty easily: Step 1: pick a trendy key term such as "ESG", "biotechnology" or, in this case "Clean". Step 2: identify all ETFs that have that term in their name. Step 3: Rank those ETFs by performance over the last year or two. Step 4: Include only the top performers in your new fund. Step 5: Calculate the overall performance as if you'd had the magical hindsight to buy those funds a year or two ago to dupe impress would be investors. Never is the warning "past performance is no guarantee of future results" more warranted. For me there isn't a bargepole long enough for me to touch this fund. I had already decided it wasn't for me. I am just going to have to do a bit more research before I sort out my current holdings. I can't cash out any LTF's this year, but I will be switching around some of my other holdings and investing in others. Overall, I am up 22% but I am not happy with some of them. I am currently in B-ASIA, BCARE, B-INNOTECH, B-LTF (tax reasons), BSET100, BTP, CG-LTF (tax reasons), DIF, TMBCOF, TMBGQG, TMBPIPF (invested 750K two months before covid hit and am 100k down), UCHINA, UROCK, UTSME.
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Post by rgs2001uk on Jun 16, 2021 20:18:29 GMT 7
I've just had a look at BCAP-CLEAN and it's worse than I'd expected. I'd assumed this was going to be another wrap of a foreign fund with very good recent performance. It's not. In fact it's the sort of fund I could set up pretty easily: Step 1: pick a trendy key term such as "ESG", "biotechnology" or, in this case "Clean". Step 2: identify all ETFs that have that term in their name. Step 3: Rank those ETFs by performance over the last year or two. Step 4: Include only the top performers in your new fund. Step 5: Calculate the overall performance as if you'd had the magical hindsight to buy those funds a year or two ago to dupe impress would be investors. Never is the warning "past performance is no guarantee of future results" more warranted. For me there isn't a bargepole long enough for me to touch this fund. Just had a look at their website, couldnt find funds over 1 year old, as was mentioned before, sorry not for me.
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Post by rgs2001uk on Jun 16, 2021 20:23:04 GMT 7
A lot of the funds in Thailand have high charges, especially when compared to overseas based funds. It is something I have grown to accept as all my money is in Thailand and it may not be worth my while to try to offshore some money to invest only to then bring it back in when I cash out. I have done pretty well with B-Innotech though. I am at 77% up on my initial investment. Probably be hurt when I cash out though. I feel for you, I really do, sometimes you just have to play the hand you have been dealt, for the time being I have decided, there is nothing in Thailand for me. My money now sits in a Krung Sri bank account earning peanuts, and thats where its staying for the time being. I disagree with that, but not knowing your circumstances, cant comment.
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Moobin
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Post by Moobin on Jun 16, 2021 20:56:34 GMT 7
A lot of the funds in Thailand have high charges, especially when compared to overseas based funds. It is something I have grown to accept as all my money is in Thailand and it may not be worth my while to try to offshore some money to invest only to then bring it back in when I cash out. I have done pretty well with B-Innotech though. I am at 77% up on my initial investment. Probably be hurt when I cash out though. I feel for you, I really do, sometimes you just have to play the hand you have been dealt, for the time being I have decided, there is nothing in Thailand for me. My money now sits in a Krung Sri bank account earning peanuts, and thats where its staying for the time being. I disagree with that, but not knowing your circumstances, cant comment. Just saving for retirement as I won't get a pension apart from Baht 5,000/month Thai social security. Got 18 months to go if my employer doesn't extend (not sure that I want them to). I'm doing okay. I own my house so no rent. Don't have to worry about visas any longer and when I retire can use the 30Baht health care scheme if I want. Including 400 days severance when I retire, I should hit my target of Baht 31M (my dream is to be a dollar millionaire at least for one day). Will sell my Bangkok house and build a new one when I move upcountry upon retirement so there should be a couple of million left from that too. Of course, everything could go tits up and my savings get decimated, but I do plan to go with more safe options upon retirement. So fingers crossed that nothing too dire happens before then.
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Post by rgs2001uk on Jun 16, 2021 21:20:29 GMT 7
Will keep my fingers crossed for you, hope you make it, always good to read of a success story, dont forget us, pls keep us updated.
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AyG
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Post by AyG on Jun 17, 2021 4:34:34 GMT 7
Hope you don't mind, but just a few observations about your situation: I should hit my target of Baht 31M (my dream is to be a dollar millionaire at least for one day). Of course, everything could go tits up and my savings get decimated, but I do plan to go with more safe options upon retirement. I presume you're familiar with the 4% rule. With 31 million in investments you should be able to take 1.24 million/year as income. That's 103,333/month, which represents a pretty decent lifestyle in Thailand, particularly if you're living upcountry. If I were you I'd decide that I'd reached my goal and would switch to focusing on preserving capital and not worry too much about investment growth. A number of the funds you hold are very much in the "high risk" category, and the risk of decimation is very real. It would be a pity to imperil your retirement at this stage when you really are pretty well positioned for comfortable post-work life.
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Post by rgs2001uk on Jun 17, 2021 21:02:55 GMT 7
I feel for you, I really do, sometimes you just have to play the hand you have been dealt, for the time being I have decided, there is nothing in Thailand for me. My money now sits in a Krung Sri bank account earning peanuts, and thats where its staying for the time being. I disagree with that, but not knowing your circumstances, cant comment. Just saving for retirement as I won't get a pension apart from Baht 5,000/month Thai social security. Got 18 months to go if my employer doesn't extend (not sure that I want them to). I'm doing okay. I own my house so no rent. Don't have to worry about visas any longer and when I retire can use the 30Baht health care scheme if I want. Including 400 days severance when I retire, I should hit my target of Baht 31M (my dream is to be a dollar millionaire at least for one day). Will sell my Bangkok house and build a new one when I move upcountry upon retirement so there should be a couple of million left from that too. Of course, everything could go tits up and my savings get decimated, but I do plan to go with more safe options upon retirement. So fingers crossed that nothing too dire happens before then. Good man, proof that farangs can make a go of it over here. Heck even if you dont hit it, lets say you hit 25, at 3% thats 750k per year or lets say 60k per month income, more than enough for upcountry,heck its enough for Bkk if your big ticket items are bought and paid for. Another route, lets assume you take 2% thats 500k, and draw down 1% of your capital same as above.
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Moobin
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Post by Moobin on Jun 17, 2021 21:27:50 GMT 7
Hope you don't mind, but just a few observations about your situation: I should hit my target of Baht 31M (my dream is to be a dollar millionaire at least for one day). Of course, everything could go tits up and my savings get decimated, but I do plan to go with more safe options upon retirement. I presume you're familiar with the 4% rule. With 31 million in investments you should be able to take 1.24 million/year as income. That's 103,333/month, which represents a pretty decent lifestyle in Thailand, particularly if you're living upcountry. If I were you I'd decide that I'd reached my goal and would switch to focusing on preserving capital and not worry too much about investment growth. A number of the funds you hold are very much in the "high risk" category, and the risk of decimation is very real. It would be a pity to imperil your retirement at this stage when you really are pretty well positioned for comfortable post-work life. Actually, considering the point you raised, I will review my investments and look into risk reduction. Most of the funds I'm in have a risk factor of 6, which I can tolerate for now, but B-CARE and B-Innotech are rated 7. What is the maximum risk risk factor you think I should be looking at? On another issue, I have tried to spread out my savings so they are not all in one area, China, healthcare, technology, etc. And I do realize that the market is way over-valued and could be in for a big tumble, but nobody knows for sure when that will happen. I do not want to lose the opportunity to make some money before going safe, but that could be greed talking. It is definitely frightening. One key point is that I want money left for my wife when I kick the bucket and a few million for my son (although I have already given him a house). Also I don't need 100,000/month. I don't even spend that now. I only spend 45,000/month now in Bangkok. I was thinking around 75,000/month to factor in for inflation. So even with a 3% return on my investments I should be able to do that. Any suggestions on local investments that would give that return?
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AyG
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Post by AyG on Jun 18, 2021 10:08:20 GMT 7
Most of the funds I'm in have a risk factor of 6, which I can tolerate for now, but B-CARE and B-Innotech are rated 7. What is the maximum risk risk factor you think I should be looking at? Unfortunately, risk factors are extremely misleading and give people a false sense of security. They are basically a measurement of the volatility of the fund (or share) price. (In the case of funds, they're often a measure of the volatility of the fund sector, not the fund itself, which is even less helpful.) Over the long term, volatility isn't that important - it all evens out. What is important, though, is whether the price will fall dramatically, leading to permanent loss. One way of looking at this is looking at the P/E (Price/Earnings) ratio. If it's high, either the investment has to perform phenomenally well over the next few years, or the share price will (probably, not 100% definitely) underperform. As a rough rule of thumb, anything below 20 is fine. 30 looks a bit steepish. 40 or more is definitely cause for concern. So, for example, if you look at TMBPIPF, the P/E ratio is 19.27, so that's not a cause for concern.* For B INNOTECH it's 22.23, which is not bad. It's substantially below the sector average of Thai global technology funds. I do also like to look at the individual top 10 holdings to see their P/E ratios.** In this case I see Salesforce 69.93, with lots of others over 30. That would be enough to make me think at least twice about the fund. I have tried to spread out my savings so they are not all in one area, China, healthcare, technology, etc. Diversification is a great thing. However, sectors like healthcare and technology are very narrow and have a much greater potential for crashing than broader funds which invest in, say a single geographic region. Personally, I don't hold any single sector funds***. Any suggestions on local investments that would give that return? Despite your bad experience with TMBPIPF, I would suggest you invest in property and infrastructure funds. The underlying investments (e.g. hotels) have been hit by COVID, but when things get back to normal they should start paying out 4-5% p.a.. Personally I have 10% in a Thai/Singapore property fund similar to TMBPIPF (PHATRA PROP-D to be precise), and a further 10% in international infrastructure funds held offshore. So, for me, 20% feels right for this sort of asset. Apart from that, I'd suggest investing in broad funds, investing in, for example, the US, Europe, UK, China, Asia-Pacific, etc.. And finally, I'd suggest investing in Thailand funds. For me, that's 10% of my portfolio, but I suspect it may be better for you to hold more than that - perhaps 20-25%. Anyway, that's my 2 baht's worth. * You can find P/E ratios on Morningstar Thailand in the "Portfolio" section for each fund. ** For this, it's best to go to Morningstar UK for the underlying fund. You need to scroll right to see the individual equity P/Es. *** I do hold property and infrastructure funds, but they are rather different, having characteristics intermediate between equities and bonds. Their values are backed by a steady stream of income (mostly inflation-proofed income), and so should not experience the highs and lows of, say single country or healthcare funds.
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