KAsset affirms that change brings opportunity

The event emphasized that every change comes with an opportunity.

KAsset observes that most investors tend to concentrate on certain asset types, which is a form of risk. The company therefore recommends investors to arrange both a core and a satellite portfolio structure.

While the core portfolio (around 70-80 % of total investment) focuses on long-term investment through asset allocation, the satellite portfolio (around 20-30 %) emphasizes short-term investment through market timing strategies in order to capitalize on the prevailing market circumstances, thus increasing the chance to earn a profit.

Speaking at the seminar, Adisorn Sermchaiwong, KAsset Executive Chairman, said that the global economy and financial market have witnessed rapid changes during the past 1-2 years.

What’s more, the recovery paths of core economies have diverged. In response to the challenges the world is facing, the investment landscape must swiftly adapt to four key issues, i.e., deglobalization, uncertainty, global warming and an ageing society.

Nevertheless, every change presents an opportunity. Businesses that can see opportunities first will gain a competitive edge. The focus should be on innovation and technological development that effectively meets consumer needs.

Business operations must be conducted in a friendly manner, accounting for customers, society and the global environment, an approach that will ultimately lead to long-term sustainability. 

Data based on the overall Thai mutual fund industry shows that most investors remain focused on a relatively small group of asset classes. As a result, their investment portfolios are vulnerable to losses as they have put excessive weight on a particular asset class, although that asset class carries lower risk or is within their risk appetite.

Therefore, an appropriate investment portfolio should be divided into two parts.

Part 1: Core Portfolio should focus on long-term investment, based on asset allocation. This part may comprise approximately 70-80 % of the portfolio, where investors can choose funds to manage their own portfolio or invest in mixed funds which already have a policy of diversifying investments in various asset classes, such as K-GA, K-GINCOME, K-PLAN2, K-PLAN3 and Wealth PLUS.

Part 2: Satellite Portfolio should place emphasis on short-term investment, based on market timing. This part may comprise roughly 20-30 % of the portfolio. Investors can choose funds at the time of investment to increase their chances of making profits.

KAsset is of the view that the possibility of a global economic recession is currently diminishing, or at worst, being put off.

This scenario is supported by GDP growth that remains solid while inflation rates worldwide have gradually eased, as expected.

As a result, policy rates have approached their peaks, and this will pave the way for an ideal “Goldilocks” environment, in which the global economy will be recovering amid low inflation, leading central banks to implement accommodative monetary policy and providing good timing for stock and bond investments.

Meanwhile, as the US economy remains robust, there is no urgent need for the Fed to cut its policy rate. This may prompt the Fed to maintain its “higher for longer” view, meaning that markets must pay closer attention to GDP and valuations in each country than the impacts of income growth.

With such a view, the Fed is not expected to cut its policy rates during the remainder of this year. 

Investors are advised to study the product characteristics, return conditions and risks before deciding to invest.  • Past operating results of mutual funds do not guarantee their future performance.

• K-GA-A(R), K-GA-A(A), K-GINCOME-A(R) and K-GINCOME-A(A) have forex risk hedging of not less than 75 % of foreign investment value.

• K-PLAN2 and K-PLAN3 may have foreign investment exposure not exceeding 30 % of NAV and may use derivatives to hedge against exchange risk of at least 90 % of foreign fixed income exposure.

The foreign equity exposure will be unhedged against exchange rate risk.

• Investment in foreign stocks is subject to volatility in accordance with market conditions and currency value.

• As the funds are not fully hedged for forex risk, forex losses or gains may be incurred by investors, or they may receive a redemption amount that is less than the initial investment amount.