What is a mutual fund? Comprehensive guidelines and how to select funds for the future

Introduction: From Confusion to Informed Investing

“Want to invest but don’t know where to start” is a common question among beginners. The encouraging truth is that regardless of experience level, everyone can build wealth through a tool called Mutual Funds. In this article, we will explore deeply and introduce 10 funds to watch in 2569 to help you step into investing with confidence.

Understanding What a Mutual Fund Is

Basic Concept

A Mutual Fund( is easiest understood as a financial cooperative on a larger scale. Many individual investors pool their money into a large fund, which is then managed by investment professionals called “Fund Managers”)Fund Manager(, working for a fund management company )Asset Management Company (AMC)(. They invest this pooled money into various assets according to a pre-set strategy to generate returns.

When we invest, our money is converted into “Units”)Units(, which have a value called “Net Asset Value” or NAV )Net Asset Value(. The NAV is calculated and announced every business day, reflecting the overall performance of all assets held by the fund. When asset values increase, NAV rises accordingly, and this difference is our profit.

) Who Should Invest in Mutual Funds

Mutual funds are suitable for:

• First-time investors: Those lacking experience in analyzing stocks or bonds, as the fund acts as a professional manager.
• Busy individuals: People with little time to follow market data; fund managers work full-time on this.
• Risk diversifiers: The principle of “not putting all eggs in one basket” is practiced by funds.
• Tax benefit seekers: Certain funds ###SSF, RMF, ThaiESG( offer tax deductions.
• High-net-worth investors: With large capital, managers can access exclusive investment opportunities unavailable to retail investors.

Types of Mutual Funds Classification

) By Asset Type

1. Money Market Funds ###Money Market Fund(

• Lowest risk, suitable for short-term cash
• Invest in deposits, high-quality government and corporate bonds )maturity not exceeding 1 year(

2. Fixed Income Funds )Fixed Income Fund(

• Low to moderate risk
• Highlight: higher returns than savings but lower than stocks

3. Equity Funds )Equity Fund(

• High risk but potential for maximum returns
• Suitable for long-term investors comfortable with volatility

4. Hybrid Funds )Hybrid Fund(

• Flexible asset allocation between stocks and bonds
• For those seeking risk diversification within a single fund

5. Alternative Investment Funds )Alternative Investment Fund(

• Invest in gold, oil, real estate
• High risk, suitable for experienced investors

) By Special Investment Policies

Index/ETF Funds: Track an index, low fees Industry Sector Funds: Focus on a single industry, high risk Foreign Funds: Access global markets Tax-Advantaged Funds: SSF, RMF, ThaiESG with tax benefits

Tips for Choosing Good Funds

Step 1: Deep Self-Assessment

Before looking outside, ask yourself 3 questions:

• Investment goals: Why invest? Retirement? House? Education?
• Investment horizon: How long can you leave your money?
• Risk tolerance: Sleep well at night with a -20% portfolio?

Step 2: Analyze Investment Policy

Read the Fund Fact Sheet to understand:

• What assets are invested
• Which countries
• Active or Passive strategy

Step 3: Compare In-Depth Data

• Past performance: Compare with indices and other funds in the same group (Remember: Past performance does not guarantee future results)
• Maximum Drawdown: Largest loss experienced, are you ready?
• Sharpe Ratio: Return efficiency per unit of risk
• Total Expense Ratio (TER): Impact on long-term returns

10 Mutual Funds to Watch in 2569

Economic Context: A Year of Recovery and Adjustment

In 2569, the year may be divided into two phases: the first half could face volatility, but the second half is expected to recover well. Key megatrends include: AI revolution, clean energy, infrastructure, and technology.

( Group 1: Thai Dividend Stocks Funds

)# 1. SCB Dividend Equity Fund (SCBDV)

• Management Company: SCBAM
• Strategy: Invest in large SET stocks with strong fundamentals, consistent dividends
• Sectors: Energy, retail, banking
• Risk Level: 6 ###High risk###
• Suitable for: Investors seeking income during investment ###Passive Income(

)# 2. Krungsri Dividend Equity Fund (KFSDIV)

• Management Company: KSAM
• Strategy: Mix of large, medium, and small stocks
• Advantages: Greater growth potential than SCBDV
• Risk Level: 6 (High risk)
• Suitable for: Investors willing to accept slightly higher risk

Group 2: Foreign Equity Funds

(# 3. KTAM World Technology AI )KT-WTAI-A(

• Management Company: KTAM
• Structure: Feeder Fund → Allianz Global Artificial Intelligence
• Focus: Companies benefiting from AI worldwide
• History: Notable during AI boom
• Risk Level: 6 )High risk###
• Suitable for: Believers in AI potential, long-term investors

4. Bualuang Global Innovation & Technology (B-INNOTECH)

• Management Company: BBLAM
• Structure: Feeder Fund → Fidelity Funds Global Technology
• Coverage: Cloud, E-commerce, Fintech, Big Tech
• Risk Level: 7 (High risk)
• Suitable for: Those seeking growth from global tech trends

5. PRINCIPAL Vietnam Equity A (PRINCIPAL VNEQ-A)

• Management Company: Principal Asset Management
• Strategy: Active, select high-growth Vietnamese stocks
• Sectors: Banking, retail, technology
• History: Outstanding performance in emerging markets
• Risk Level: 6 (High risk)
• Suitable for: Diversifying into emerging markets

Group 3: Bond Funds

(# 6. Krungthai Short-Term Bond Plus )KTSTPLUS-A(

• Management Company: KTAM
• Assets: Bonds, deposits )Investment Grade###
• Average Maturity: Not exceeding 1 year
• Highlights: Low volatility, steady returns
• Risk Level: 4 ###Moderate to low(
• Suitable for: Low-risk investors, emergency fund

) Group 4: Hybrid Funds

(# 7. TISCO Flexible Plus )TISCOFLEXP(

• Management Company: TISCO Asset Management
• Strategy: Adjust stock-bond ratio 0-100% based on market conditions
• Highlights: Flexible according to market
• Risk Level: 6 )High risk###
• Suitable for: Trusting skilled managers

Group 5: Themed Megatrend Funds

(# 8. Krungsri ESG Climate Tech )KFCLIMA-A(

• Management Company: KSAM
• Structure: Feeder Fund → DWS ESG Climate Tech
• Trend: Clean energy, electric vehicles, energy efficiency
• Risk Level: 6 )High risk###
• Suitable for: Future-oriented sustainable investors

9. K-Global Healthcare (K-GHEALTH)

• Management Company: KAsset
• Structure: Feeder Fund → JPMorgan Global Healthcare
• Coverage: Pharmaceuticals, medical tech, health services
• Highlights: Defensive growth, essential in all conditions
• Risk Level: 7 (High risk)
• Suitable for: Investors seeking stable growth

10. Asset Plus Thai Sustainable Equity (ASP-THAIESG)

• Management Company: Asset Plus
• Strategy: Active, select Thai ESG stocks
• Focus: Environment, Social, Governance
• Tax Benefits: ThaiESG(
• Risk Level: 6 )High risk###
• Suitable for: Those wanting quality and sustainability

Comparison Table of the 10 Funds

Advantages and Disadvantages of Mutual Funds

( Advantages

• Risk Diversification: Small amounts can own a variety of assets
• Professional Management: Experts monitor and decide
• High Liquidity: Open-end funds can be traded daily
• Low Investment Threshold: Many funds start with hundreds or thousands of baht
• Variety: From very low to high risk

) Disadvantages

• Fees: Management fees deducted from returns
• Limited Control: Cannot pick individual stocks
• Manager Risk: Poor decisions may lead to lower-than-expected performance
• Tax Burden: Dividends are subject to 10% withholding tax

Mutual Fund Fees: What You Need to Know

( 1. Fees Charged Directly to Investors

• Sales Fee: Charged at purchase )e.g., 1.5%, 10,000 Baht → actual investment 9,850 Baht(
• Redemption Fee: Charged when selling back )less common now###
• Switching Fee: When moving between funds ###within the same AMC###

( 2. Fees Embedded in NAV

• Management Fee: Cost of fund management
• Custodian Fee: Safeguarding assets
• Registrar Fee: Maintaining shareholder info

All are reflected in TER)Total Expense Ratio(, a key figure for comparison.

Long-term Impact of Fees

Even a 1% difference in fees may seem small, but over 20-30 years, compounded returns can lead to tens of percent difference in final portfolio value. Choosing funds with reasonable fees is crucial for long-term wealth building.

Conclusion

Mutual Funds have proven to be powerful, accessible, and suitable for investors at all levels.

In 2569, a year full of opportunities and challenges, diversifying your portfolio with funds aligned to global megatrends will be key to wealth creation.

Investing in mutual funds is not just a starting point for wealth accumulation but a sustainable strategy to safeguard your future and your family’s. With deep understanding and careful selection, you can confidently journey toward financial prosperity.