Within the next few weeks I'll have largely completed the phase out of all our investments with Aberdeen in Thailand, which I started a couple of years or so back - with the exception perhaps of a small holding in Aberdeen Smart Capital RMF, which I took out for tax benefits, and will either identify an alternative to or cash out of completely in a couple of years or so.

I've held investments in Aberdeen Thailand (including their predecessors Nakornthorn, Nakornthorn Schroders etc) for over 2 decades.

Aberdeen Growth (ABG) (originally under the Nakornthorn/Schoders name) was the first Thai equity fund I bought in the late 1990's, just after the Asian Financial Crisis (AFC). I did well for many years, and consistently outperformed the index for most of the earlier years. It really helped me gain confidence in investing in Thailand and the merits of doing so. Proceeds from that original investment (baht cost averaged in) have been repaid multiple times over. Profits helped purchase our first condo, and later our house. It was great for building Thai assets, reducing currency risk, and having Thai assets to fall back on as needed.

But in the last few years:

1) the performance of Aberdeen's funds have dropped, as noted on other threads;

2) In addition they seem to have been raising fees on their funds in Thailand;

3) Combine that with Thai equity generally markets lower returns in recent years;

and that's 3 core reasons why they no longer fit for me. They'd become my "first sell funds" in recent years now living off portfolios instead of being at the Wealth creation stage.

Looking forward, while Thailand's equities should still be able to produce a decent return, I think returns will be less stellar in coming years.

So funds like ABG which charge a 1.875% management fee and ball park 2% overall, look ridiculousy expensive. In strong bull markets of years gone by, with good double digit returns higher charges were worth the outperformance that ABG obtained vs the index. But with more moderate returns expected of say 7% p.a. going forward in todays world of globally lower returns, rather than strong double digits, its going to be very difficult for their funds to justify a 2% charge. That 7% could of course be less, and is just an idea of perspective of what I think may by a reasonable mid-long term average target, compared to double digits of years gone by since AFC.

These issues apply to most of their fund range now in Thailand. Expensive. Lagging performance. Lower market returns expected.

At this stage I think someone would likely be better off in a low cost ETF such as TDEX, than ABG. TDEX charges only 0.4% p.a. The extra 1.5%-1.6% charges is going to be very difficult for Aberdeen to make up.

Another preferred option for Thai equities would be One AM's low cost funds, which are lower at 0.52%. I can't see how Aberdeen justify their fees now there are so many more players and more competition in the market. One AM for example have a decent actively managed fund, which has beaten the index in recent years, with management fees of less than a third of Aberdeen.

Looking back, the decision to start phasing out a couple of years back was the right one. With hindsight I should maybe have done sooner and a quicker exit. That said no-one ever gets the timing perfect.

Since inception in 1997, ABG has returned 12% (after charges) vs only 8.2% for the SET Total Return Index. So a clear 3.8% p.a. annualised outperformance over 22 years. That compounds to a massive difference That would have included the Asian Financial Crisis in 1997.

By those numbers: THB 1million invested 22 years ago:

ABG would have become around THB 12.1 million

SET TRI Index would have become THB 5.7 million

That's a massive difference. THB 6.4 million more on a THB 1 million investment. Worth more than double. A clear case for past active management, even with higher fees.

In my case I started investing a couple of years after the financial crisis so my annualised returns over about 20 years are higher than 12% p.a. and my margin is wider relative to the index.

So while my exit timing could have been better, the entry timing was great. Plus 15 years of strong outperformance vs index has far outweighted underperformance in the last say 5 years. This has left me on balance streets ahead of SET TRI index returns, by going for active management at that time.