Vayupak Mutual Fund: The Game-Changer Behind Thailand’s Soaring Stock Market

Since the government announced that it will open a new round of public fundraising through Vayupak Mutual Fund 1, the Thai stock market has started to return to vitality and continues to improve.

Thai stocks jumped from 1,300 points to almost 1,440 points within 1 month, but the question that follows is: Vayupak Mutual Fund will be justified ‘Trend igniter’ makes Thai stocks temporarily hot Or will it be the starting point for the long-term growth of Thai stocks?

“From today to the next 10 years, what we are looking at is How to create the best long-term returns for both groups of investors,” Thanachot Rungsitthiwat said. Managing Director and Chief Investment Officer MFC Asset Management Company Limited (MFC), one of the people responsible for managing Vayupak Mutual Fund 1 together with Krung Thai Asset Management Company Limited (KTAM).

A look back at Vayupak Mutual Fund 1

Vayupak Mutual Fund 1 was established in 2003 after the Thai stock market went through the Tom Yum Kung crisis in 1997, when Thai stocks fell from 1,700 points to just 300-400 points.

One of the important objectives of Vayupak Mutual Fund 1 at that time was to raise funds from the public and the government. The initial amount is 100 billion baht, which is raised from 2 groups of unit holders:

• Type A unit holders include general investors worth 70 billion baht.
• Type B unit holders include the Ministry of Finance, worth 30 billion baht.

The type A investment unit then had an investment protection policy similar to the current new round of fundraising.

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In the opinion of Dr. Pipat Luengnaruemitchai Chief Economist Kiatnakin Phatra Financial Business Group (KKP) Consider Vayupak Mutual Fund a thing of the pastIt was an investment structure that responded perfectly to the needs of those times. Because during the fund issuance The Thai stock index is in the area of ​​500-600 points, but after 10 years the Thai stock index has increased to the area of ​​1,500-1,600 points.

And along the way, investors receive annual returns of 3-7% on their initial investment. Because the profits of listed companies continue to grow. until there is money to pay dividends before the fundIt will repay all type A investment units since 2013.

After that, Vayupak Mutual Fund 1 switched to an open-end fund. And there is only a type B unit holder, namely the government holding 100% of the shares.

Another 10 years have passed and the Thai stock market has just gone through the COVID-19 crisis. and still unable to recover to its original level as much as the market can do.

Then dust off Vayupak Mutual Fund 1 to raise funds from public and institutional investors in this new round. Will it help revive the Thai stock market as it has done in the past?

The challenge of ‘Vayupak Mutual Fund One’ Version 2024

“From today to the next 10 years, what we are looking at is How to create the best long-term returns for both groups of investors,” Thanachot Rungsitthiwat said. Managing Director and Chief Investment Officer MFC Asset Management Company Limited (MFC), one of the people responsible for managing Vayupak Mutual Fund 1 together with Krung Thai Asset Management Company Limited (KTAM).

Between the original fund in the last 10 years and the fund after opening a new round of fundraising. What will be different from before is The maintenance structure of investment units has changed. As there is a government that is the main unit holder There will be general investors and organizations that will join in to invest as well.

One thing that has to be accepted in the past is that Vayupak Mutual Fund 1’s return is slightly below the benchmark index, but in the future “of course the fund manager will have to try to beat the benchmark,” he said. Thanachot.

Although the proportion of assets that the fund will invest in Thai stocks and other debt instruments may not be much different from the current portfolio. The majority of them will still be Thai stocks. But there will be more emphasis on Operational Management.

“The types of stocks can be different. In the past, the fund had a large share of large semi-state enterprises in its portfolio. But in the future, it may not be necessary to hold any of these stocks in such a large proportion. and will focus more on stocks with high ESG ratings.”

Another challenge that fund managers face in the short term is Thai Stocks which are running up hot To the point that many stocks that used to be in the ‘cheap’ zone may no longer be cheap.

“Ask if we’re still seeing stocks that are undervalued today. I believe there are still some. The stocks we invest in must be analyzed in terms of fundamental factors to see if the price is reasonable or not. If the price of the stock rises beyond the fundamental level I will probably still not invest,” said Thanachot.

Will Thai stocks return to growth in the long term?

Recently, more capital has flowed out of Thai stock funds into foreign stock funds. Meanwhile, the launch of the ThaiESG fund and the Vayupak 1 Mutual Fund helped investors return to paying more attention to the Thai stock market in the short term.

“But it is certain that Thai stocks will continue to grow. Must come with operational results and a quality company. And if the government policy can answer the question There is a chance that investors will become more interested in Thai stocks,” Thanachot said.

Who is Vayupak Mutual Fund One suitable for?

Although it is a fund that mainly focuses on investing in stocks. But with the planned mechanism This makes the fund more like debt instruments. Compared to government bonds and private bonds Vayupak Mutual Fund 1 is probably an option in the middle.

“If you want an investment that protects against risk. You have to choose government bonds. But the interest rate will be lower. Meanwhile, private bonds can provide higher fixed returns. As for Vayupak Mutual Fund 1, it is expected to return at least 3% per annum. But if you do well that year, there is a chance you will get higher returns,” Thanachot said.

What returns should investors expect?

For Vayupak Mutual Fund, Nueng, as a fund manager, cannot direct how much profit the fund will give. But if talking about investing in general Thanachot thinks investors should expect returns that can beat inflation.

“The inflation we are talking about is not inflation according to the website of the Ministry of Commerce. But inflation in each person’s daily life will be different. If the savings invested return a lower return than our future expenses. It shows that our wealth has diminished.”

Assuming that our overheads will increase by X%, we should be able to invest at least X% in earnings, but it is important that We must not make unrealistic assumptions. Including taking into account other factors such as ageing.

Which assets will be interesting to invest in after this?

Thanachot concluded by saying: Looking at many interesting assets One of these is real estate investment trusts (REITs), which have fallen significantly in price during periods of rising interest rates.

“Currently, many REITs are still trading lower than they should be. In some countries, buying REITs on the market offers a lower price than the actual assets. But you must consider REITs that better meet the needs of the modern world, such as research centers for rent, instead of REITs such as office buildings that are even cheap. But it is affected by changes in people’s behavior or oversupply.