Value of Thai sustainable funds doubled in one year

The net asset value of sustainable funds in Thailand has nearly doubled since last year, according to Morningstar Research, because of attractive returns and low risk as local investors become more aware of and place a higher premium on responsible business.

“The first quarter of this year the value of global sustainable investment funds rose to nearly US$2 trillion,” said Chayanee Juengmanon, a Senior Research Analyst at Morningstar Research Thailand.

Chayanee said that “Looking at the long-term overview, sustainable funds have seen a steady rise in asset valuation. Their value has reached $600 billion in 2018 and soared to nearly $2 trillion in a very rapid three-year growth, excluding the money market funds, feeder funds and unit trusts.”

As of May 31, the total net asset value of sustainable funds in Thailand stood at 56 billion baht, nearly doubling from the end of 2020 at about 30 billion baht.

Almost all assets in the Thai sustainable funds are foreign investment funds (FIFs) whose value accounts for 97%, or 55 billion baht of the total value, while the domestic sustainable investment contributed about 1.5 billion baht.

K Positive Change Fund is Thailand’s largest sustainable fund among other 52 funds with a total asset value of 14 billion baht, while in terms of returns, the Innotech Sustainable Thai Equity Systematic Fund has reported the highest returns at 24.1% for the first five months, compared to the SET Total Return, a domestic benchmark that stood at 11.9%.

Meanwhile, other sustainable investment funds have average returns of about 10%, which is still significantly higher than global funds’ average returns of 6.6%.

Chayanee added that “Sustainable investment funds in Thailand are gaining traction from institutional and long-term investors such as provident funds, pension funds and retirement funds, and are expected to grow rapidly in the future.”