BCAP keen on B100bn, mainly from six new ETFs

Bangkok Capital Asset Management (BCAP) targets assets under management (AUM) of 100 billion baht over the next three years, driven partly by offering new exchange-traded funds (ETFs) for investors.

This year’s AUM is projected to increase to 38 billion baht, a rise of 40% year-onyear, said BCAP managing director Mayvadee Prasertsintanah.

The company had AUM of 27 billion baht in 2017, a 30% gain from the year before.

Mrs Mayvadee said BCAP will launch six ETFs this year, with the first fund targeting small and medium-cap stocks with good corporate governance records. There will be 30-40 stocks allocated to each ETF.

The company is also considering launching long-term equity funds (LTFs) and retirement mutual funds (RMFs) that invest in ETFs, she said.

“This year we will offer the most innovative index funds and expand our investor base in both private funds and provident funds, targeting Bangkok Bank’s [BBL] clients,” said Mrs Mayvadee.

BCAP chief investment officer Thanavut Pornrojnangkool said the company plans to launch a mutual fund covering all indices in Thailand, with the fund including passive and semi-passive investment modules, an index fund based on LTF and RMF models, and other complicated products.

ETFs are the most actively traded securities on global securities exchanges, said Mr Thanavut. For example, the S&P 500 Index ETF is the most active security trading on the New York Stock Exchange, and there are more than 100 ETFs listed on the Korean Stock Exchange, where ETF trading represents around 40% of total securities trading on a daily basis, he said.

ETFs have been relatively inactive in Thailand because of minimal supply as there are only three active ETFs, two of which are issued by BCAP. Insufficient liquidity is another factor, said Mr Thanavut.

BCAP will solve this problem by using new technology to select and analyse underlying stocks, he said.

ETFs are expected to replace mutual funds in the future because they have greater trading liquidity and transparency as their price and investment returns will move in accordance with the underlying assets, said Mr Thanavut. Many equity funds and other index funds cannot disclose all assets publicly because of confidentiality of investment strategy.

“BBL will have more access to the wealth management business in the long run because of fee income and other traditional operations generating lower income going forward. Wealth management is the future,” he said.