UOB Thai asset manager launches structured fund

ThailandÆs UOB Asset Management is launching its second structured note fund, this one backed by Thai equities. Its UOB Select SET 50 Index Link 1 Fund will track the returns of the Stock Exchange of Thailand (SET) 50 Composite index and will invest in local banks structured notes with a capital guarantee.

According to Korawut Leenabanchong, CIO at UOB-AM Thailand, the return of the new fund will be calculated by taking the average of the SET index, which will be marked at the end of each month. This will occur for 36 months, which the asset management has tapped as the lifecycle of the fund.

The firm decided to launch the new structured fund, which will invest in Thai baht, for a number of reasons. Firstly, it believes that the SET 50 index will likely head upwards in the coming three years, despite the present uncertainty with the impending general election. Additionally, UOB Asset Management Thailand is also looking an already strong baht as a catalyst to lure investors to the fund and a spur for the economy in coming years.

Last year, the firm launched a similar fund to investors in Thailand, but it has more active in launching funds with different asset classes in recent times. Last month, it launched its UOB Smart Asia fund, which is the second largest foreign investment fund (FIF) to be launched in the country. Additionally, the firm has plans to launch more FIFs in the coming months, which will likely invest in highly rated foreign-bank promissory notes.

In total, UOB Asset Management Thailand now counts roughly Bt55 billion ($1.86 billion) in assets and expects launched of new FIFs to contribute up to Bt8 billion (approximately $270 million) to its total asset base in 2007.