Super saving funds (SSFs) and retirement funds (RMFs) saw 36% and 8% growth in net inflows, respectively, during the first 11 months this year as investors were attracted by high returns from foreign stocks.
Both types of funds have recorded a net inflow of 18 billion baht and total assets under management (AUM) of 390 billion baht, according to Morningstar Research Thailand.
The funds are expected to see a surge of inflow during December when investors in these long-term funds will be granted special privileges for tax deductions each year.
An SSF offers a tax deduction of not more than 30% of net income with a maximum of 200,000 baht. An RMF provides a tax reduction of up to 30% of income with a maximum of 500,000 baht.
Last year in December alone, RFFs saw a total inflow of more than 26 billion baht.
All types of long-term investment including life insurance can be used to claim a tax deduction of up to 500,000 baht per year.
According to Morningstar, SSFs have invested more than 30% of their total assets in foreign stocks in 2021 which show significant growth from last year.
Most of them are US and Chinese stocks and concentrated in healthcare and technology which offer high returns compared to investments in other assets.
SSFs' total assets value rose to 30 billion baht during the first 11 months this year and saw a total inflow of over 6.6 billion baht, up 36% from the same period last year.
SSFs with the highest one-year returns are Asset Plus Small and Mid Cap Eq SSF with 39.2% returns, Tisco Mid and Small Cap Equity SSF with 32.4% returns, and KKP Expanded Tech-Hedge SSF with 31.5% returns.
K Positive Change Fund is one of the largest SSFs with a net asset value of 2.9 billion baht. Its investment is also concentrated in healthcare and technology such as Moderna and DexCom, which together account for about half of its portfolio.
According to Morningstar, there are a total of 50 new SSFs this year, most of which were opened for investment in the second half of the year.
"SSFs are long-term investments so investors should be systematic in planning in terms of fund types, investment in property, appropriate investment value according to the investor's age. They should consider fund fees which are an important factor for long-term investments," Morningstar said.
RMFs' total AUM for the first 11 months this year stood at 360 billion baht, up 8.2% from the end of last year. They have recorded net inflows of 12 billion baht from 9 billion baht in the same period last year.
Similar to SSFs, RMFs' investments are mostly concentrated in foreign equities led by Chinese stocks, with a net inflow of 13 billion baht.
RMFs with the highest returns during the 11 months this year include Asia Plus Vietnam Growth RMF (ASP-VIETRMF) with 65.33% returns, Bualuang India Mid Cap RMF with 46.95% returns and K Mid Small Capital Equity RMF with 35.71% returns.