Over the past five years, the asset management industry in Thailand has changed considerably. Specifically, investment trends have now shifted away from a fixed-income-driven core. Investors are exploring more opportunities in the market – including investment solutions from foreign fund houses – to tap into the benefits of diversification.
Notably, a deregulation measure from Thailand’s Securities and Exchange Commission has also allowed accredited investors to invest in all securities. This means they can now buy funds that are invested into repurchasing agreements, hedge funds, securities lending and borrowing.
Capturing the growing opportunities of this rapidly developing market is UOB Asset Management (UOBAM). As one of the first asset managers in Thailand to introduce diversified investments and real estate subsectors globally, the firm continues to develop new funds across different market cycles, while also investing in new technology and providing responsive customer service.
From peer competition in Thailand to staying nimble in the face of technological changes, the firm is ahead of the curve when it comes to managing investments for clients. Mrassociates spoke to Vana Bulbon, CEO of , to get a better understanding of the company’s progress over the past year.
What progress has UOBAM made over the past 12 months?
For the year 2016, the company recorded historically high assets under management (AUM) of THB 306bn ($8.6bn) – this encompasses the full range of investment management services, including mutual funds, private funds and pension funds.
Amid the uncertainty in the investment climate, UOBAM (Thailand) has expanded the offering of products that can deliver sustainable returns during different market cycles. For example, we recently launched two foreign fixed income funds, a global asset allocation fund and a global real estate fund.
The company recommends the United Small and Mid Cap Fund (UTSME), which mainly invests in Thai small and mid-cap stocks outside the SET50 index. In 2016, UTSME generated a 35.5 percent return, compared with its benchmark at 19.79 percent. Consequently, UTSME has been ranked the top year-to-date performing fund among 571 Thai equity funds.
Are there any specific funds the company has developed recently?
A variety of funds have been established for customer demand. These include the Foreign Investment Funds, which were launched to capture income trends and investment opportunities – the end result is the creation of solid business fundamentals and highly attractive valuations. UOBAM (Thailand) also launched the United Income Daily Plus Fund and United Platinum Income Plus Fund, which invest in both local and foreign companies.
UOBAM (Thailand) has also stayed ahead of the market by exploring new products for distribution channels and investment innovation
It is worth noting that the United Income Focus Fund was created in order to provide regular income to investors with an all-round strategy, as it adopts a disciplined and multilayered risk management approach to mitigate risk and volatility. In addition, there is the United Flexible Income Fund, which has been structured as a global real estate fund with a flexible portfolio management strategy.
For the company’s private wealth investment arm, UOBAM (Thailand) has harnessed an in-depth understanding of its individual investors. This has enabled the firm to provide customised products and advisory services that cater to the changing investment needs of clients. As a result, AUM in 2016 increased 18.8 percent to THB 81.6bn ($2.3bn) from THB 68.7bn ($1.9bn) the previous year [see Fig 1].
What has made UOBAM (Thailand) so successful?
Throughout its 20 years of investment experience in Thailand, the company has continued to place a very strong emphasis on customer satisfaction. Indeed, customer service remains the bedrock, long-term business strategy, as well as in day-to-day operations. UOBAM (Thailand) has also stayed ahead of the market by exploring new products for distribution channels and investment innovation. This also includes being responsive to customers’ needs, as well as their changing requirements and expectations.
What are some of the products the company has introduced?
Our Foreign Investment Funds were launched in order to capture income trends and investment opportunities in the areas in which we had witnessed solid business fundamentals and attractive valuations. Leveraging on the collaboration within the UOBAM group – which has been named the Best Fixed Income Fund House by Morningstar – we recently launched the United Platinum Income Plus Fund. This fund invests in instruments that encompass Thai domestic and foreign fixed income investments, foreign deposits, Asian high-yield fixed income and contingent capital securities.
How is the company placed within the region?
One of the company’s strengths is its advantage as a regional fund house, which connects investment managers across the region and selects the best performing funds from them.
UOBAM is headquartered in Singapore and has an extensive presence throughout Asia, with regional business and investment offices in Malaysia, Thailand, Brunei, Japan and Taiwan. It has two joint ventures: Ping An-UOB Fund Management Company in China, and UOB-Sumitomo Mitsui Asset Management in Singapore. In addition, the company has forged strategic alliances with UTI International in India and Wellington Management in Singapore.
As a result of this extensive reach, the company has secured a wide array of investment opportunities through numerous regional and strategic partners, thus creating a distinct advantage over other local houses. Essentially, it is our regional network and presence that enables us to provide such an exciting variety of investment products, which in turn distinguishes us from our competitors.
How does the company analyse and manage risk?
We achieve success through an astute process of managing risk, conducting fundamental research and internal control. To achieve this, all of our stakeholders are given a clear understanding about the levels of risk involved at any given point, which is supported by our highly experienced risk officers, monitoring tools and review processes.
What are UOBAM (Thailand)’s plans for the coming year?
The company’s investment approach aims to provide a wide range of products for investors, thereby assisting them with finding suitable investment solutions and achieving their long-term objectives.
With this core objective in mind, UOBAM (Thailand)’s retail business strategy for later this year and next is to continue expanding the business and explore new ways to meet customers’ investment goals. With our foreign investment expertise and network of strategic partnerships, we are confident in achieving further growth and finding new opportunities for our customers. The company is also developing and upgrading its technology platforms at present, which involves revamping online trading platforms to enhance user experience, as more clients are now trading on the go. Finally, a mobile app should be available by Q3 2017.
What does the future look like for the company?
As a company, UOBAM (Thailand) is deeply committed to its customers, and we are grateful to be recognised across the industry. Looking forward, we will continue to provide a wide range of innovative investment products and services that will enable our customers to meet their investment goals – even with the changing economic market cycle. With this strategy in place, we will continue to drive the growth for the business.
By the end of 2017, the company expects to increase total AUM by 15 percent to more than THB 350bn ($10bn), from THB 306.2bn ($8.98bn) in 2016.
To do so, a two-pronged strategy will grow both the retail and institutional businesses. For the retail business, UOBAM (Thailand) will expand its distribution network, both through existing distributors and new distributors, in order to broaden our client base.
Moreover, we plan to increase the number of new agents that are fully equipped with the knowledge necessary to serve our client base. We are also making sizeable investments to upgrade our technology platforms. For example, we are using enriched data to help us better understand our clients’ needs, resulting in more strategised solutions. We also recently revamped the UOBAM (Thailand) website to enhance user experience for customers.
In the institutional business, the company will approach growth in two ways. For private funds, collaboration will be deepened with our parent company UOB (Thailand) to offer innovative investment solutions to our customer base. For provident funds, the firm is working with UOB’s personal financial services branch to develop a bundled banking and investment solution for retail banking customers.