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 instruments, including government and/or corporate debt securities, inflation-linked debt instruments, and/or deposits or deposit-equivalent instruments across global markets. The Fund shall maintain an aggregate exposure to fixed-income instruments of not less than 80% of its NAV at all times. The average investment in any single underlying fund during an accounting year shall not exceed 79% of the Fund’s NAV.
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 may be 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 mutual funds that focus on debt securities whose issue rating or issuer rating is Investment Grade.
For the remaining portion of the portfolio, the Fund may invest domestically and/or 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, in accordance with the regulations prescribed 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. In determining the extent of currency hedging, the Fund Manager will take into consideration prevailing financial market conditions and relevant factors, including economic, political, monetary, and fiscal developments, in order to assess currency trends.
For example, where the Fund Manager expects the U.S. dollar (USD) to weaken, the Fund may hedge a substantial portion of its foreign currency exposure. Conversely, where the U.S. dollar is expected to strengthen, the Fund may refrain from hedging or may hedge only a limited portion of its exposure. However, if the Fund Manager determines that currency hedging would not be in the best interests of unitholders or may adversely affect potential returns, the Fund may choose not to hedge foreign exchange risk. Investors should note that hedging transactions involve costs, which may reduce the Fund’s overall returns.
In addition, the Fund may invest in derivatives for Efficient Portfolio Management (EPM) and/or risk reduction purposes, with underlying references including interest rates, foreign exchange rates, inflation indices, credit ratings, credit events, and/or assets in which fixed-income funds are permitted to invest. Such transactions may be undertaken to enhance returns, reduce costs, or for other purposes permitted 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, foreign 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 obligations when due, the Fund may not receive the expected return and may incur losses on its derivative investments.
The Management Company will conduct ongoing analysis and monitoring of factors affecting the value of the underlying assets and will assess the creditworthiness of counterparties prior to entering into transactions. The Fund will primarily transact with counterparties whose credit ratings are Investment Grade.
Where the Fund invests in derivatives or structured instruments whose returns are linked to an index, and such index is modified or discontinued, the Fund may dispose of the relevant instruments to mitigate liquidity risk or price volatility. Alternatively, the Fund may continue to hold the instruments if an appropriate 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 until maturity.
Where derivatives are used for hedging purposes and the derivative underlying is not identical to the asset being hedged, the Management Company will use historical data to calculate the absolute correlation coefficient between the two. However, there remains a risk that future movements of the derivative underlying and the hedged asset may diverge from historical patterns, resulting in less effective hedging.
Investment in Affiliated Funds (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 and conditions prescribed by the SEC Thailand. The underlying fund may not invest back into the investing fund (circular investment), while the underlying fund may invest in another fund managed by the same asset management company for no more than one additional tier.
Voting rights in respect of investments in affiliated funds shall be exercised in accordance with the rules prescribed by the SEC Thailand. The investing fund shall not vote in favor of the underlying fund. However, where the underlying fund is unable to obtain the required approval due to such voting restrictions, the Management Company may seek approval from the SEC Thailand, provided that the resolution has been approved by more than one-half of the remaining unitholders of the underlying fund.Provide your feedback on BizChat

Dividend Policy

Yes

Benchmark

Registration date

28 March 2024

Fund Manager Name

Ponlasin Kijmuntarvorn
Pornphen Chuleeprasert