Category

Foreign Investment Fund

Investment Policy

The Fund has a policy to invest in units of foreign fixed-income mutual funds and/or foreign fixed-income exchange-traded funds (ETFs), diversified across various regions worldwide, through investments in at least two underlying funds, with an average investment of not less than 80% of the Fund’s net asset value (NAV) over an accounting year.
The underlying funds primarily invest in fixed-income securities, including government and/or corporate debt instruments, inflation-linked debt securities, and/or deposits or deposit-equivalent instruments across various regions globally. The Fund will maintain an aggregate allocation to fixed-income instruments of not less than 80% of its NAV at all times. Investment in any single underlying fund shall not exceed 79% of the Fund’s NAV on average during an accounting year.
The Fund will invest overseas and, as a result, will maintain a net exposure to foreign investment risk averaging not less than 80% of its NAV during an accounting year, or such other proportion as prescribed by the Office of the Securities and Exchange Commission of Thailand (“SEC Thailand”). The allocation among foreign mutual funds and/or foreign ETFs will be determined at the discretion of the Management Company based on prevailing market conditions and investment outlooks. Investments in such underlying funds shall be made in accordance with the Fund’s investment policy and the rules and conditions prescribed by the SEC Thailand.
The Fund will primarily invest in units of foreign funds that focus on fixed-income securities with an issuer or issue credit rating of Investment Grade.
For the remaining portion of the portfolio, the Fund may invest both domestically and internationally in other financial instruments, securities, assets, or alternative income-generating investments as permitted by the SEC Thailand. The Fund may also invest in Non-Investment Grade debt securities, Unrated debt securities, and/or Structured Notes, subject to the applicable regulations issued by the Capital Market Supervisory Board, the SEC Board, and/or the SEC Thailand.
Derivatives and Foreign Exchange Hedging
The Fund may invest in derivatives for the purpose of hedging foreign exchange rate risk, at the discretion of the Fund Manager. When implementing currency hedging strategies, the Fund Manager will consider prevailing financial market conditions and other relevant factors, including economic, political, monetary, and fiscal developments, in order to assess the expected direction of the relevant currencies.
For example, should the Fund Manager anticipate depreciation of the U.S. dollar (USD), the Fund may hedge a relatively large portion of its foreign exchange exposure. Conversely, if the U.S. dollar is expected to appreciate, the Fund may choose not to hedge, or may hedge only a limited portion of its foreign exchange exposure. However, if the Fund Manager determines that currency hedging would not be in the best interests of unitholders or could adversely affect potential returns, the Fund may refrain from hedging foreign exchange risk. Investors should be aware that hedging transactions may involve costs that could reduce the Fund’s overall returns.
In addition, the Fund may invest in derivatives for Efficient Portfolio Management (EPM) and/or hedging purposes, with underlying references including interest rates, foreign exchange rates, inflation indices, credit ratings, credit events, and/or other assets in which fixed-income funds are permitted to invest. Such investments may be undertaken to enhance returns, reduce costs, or otherwise in accordance with regulations prescribed by the SEC Thailand.
Risks Associated with Derivatives
Derivative contracts entered into by the Fund may reference one or more underlying variables, including interest rates, exchange rates, inflation indices, credit ratings, credit events, or credit risk. If an event adversely affecting the derivative contract occurs, or if a counterparty fails to perform its contractual obligations, the Fund may not receive the expected return and could incur losses.
The Management Company will analyze and continuously monitor factors affecting the underlying assets and assess the creditworthiness of counterparties before entering into transactions. The Fund will primarily transact with counterparties having Investment Grade credit ratings.
Where derivatives or structured products reference an index, and the methodology of such index is modified or the index is discontinued, the Fund may dispose of the relevant instruments in order to mitigate liquidity risk or price volatility. Alternatively, the Fund may continue to hold such instruments if a suitable replacement index is available and the Management Company determines that the change will not materially affect the investment, particularly where the instrument is intended to be held to maturity.
Where a derivative used for hedging references a different underlying asset than the asset being hedged, the Management Company will utilize historical data to calculate the absolute correlation coefficient between the two. However, there remains a risk that future movements of the underlying reference asset and the hedged asset may differ from historical patterns, resulting in less effective hedging outcomes.
Cross Investment
The Fund may invest in units of mutual funds managed by the same Management Company in an amount not exceeding 20% of the Fund’s NAV.
Such investments must comply with the Fund’s investment policy and the rules prescribed by the SEC Thailand. The underlying fund may not invest back into the investing fund (circular investment), and may invest in another fund managed by the same asset management company for no more than one additional layer.
Voting rights in respect of investments in affiliated funds shall be exercised in accordance with SEC regulations. The investing fund may not vote in favor of the underlying fund. However, if the underlying fund is unable to obtain the required resolution because of such restriction, the Management Company may seek approval from the SEC Thailand, provided that more than one-half of the remaining unitholders of the underlying fund have approved the relevant resolution.Provide your feedback on BizChat

Dividend Policy

Yes

Benchmark

Registration date

28 March 2024

Fund Manager Name

Ponlasin Kijmuntarvorn
Pornphen Chuleeprasert