However, the main benefit of investing in LTF mutual funds, aside from being an investment avenue for investors, is that the money earned from investing in LTF funds can be used to reduce tax liabilities (up to 15% of taxable income, not exceeding 500,000 baht per year). Therefore, if you find that you can hold investment units for a long period, at least 7 years or more, without the obligation to invest continuously every year, and you are interested in long-term stock investments while accepting the risks and volatility of the stock market, then LTF mutual funds may be the answer to your investment needs, allowing your money to grow.


TerraBKK Research would like to explain that Long Term Equity Funds (LTF) are mutual funds established to help stabilize the Thai capital market. LTF funds primarily invest in stocks, with a policy that requires them to invest at least 65% of the net asset value in stocks. In the stock market, these are referred to as institutional investors (Local Institutions). Thai investors can choose to invest in LTF mutual funds, which are divided into two main types: dividend-paying LTF funds and non-dividend-paying LTF funds. Details are as follows:

Dividend-Paying LTF Funds

For LTF funds that pay dividends, the advantage is receiving cash dividends, which helps reduce the risk from stock market volatility. However, the disadvantage is that the dividends received are subject to a 10% withholding tax. The payment of dividends will result in a decrease in the value of the investment units by the same amount as the dividends paid. Therefore, it is possible that the returns from capital gains may be lower than those from non-dividend-paying LTF funds. For those interested in dividend-paying LTF funds, TerraBKK Research has selected 12 dividend-paying LTF funds with an average return of 9% or more over the past 10 years as follows:

Non-Dividend-Paying LTF Funds

For non-dividend-paying LTF funds, the disadvantage is that there will be no dividends throughout the holding period. However, the advantage is that all funds will be reinvested continuously. TerraBKK Research has selected 12 non-dividend-paying LTF funds with an average return of 9% or more over the past 10 years. Details are as follows:


Finally, TerraBKK Research would like to remind you once again that investing in LTF mutual funds requires holding for at least 7 calendar years. There is no obligation to invest continuously every year. If you do not comply with the conditions, such as holding the investment units for less than 7 years, you will have to repay the tax exemption received, and any profits from selling the investment units will be included as taxable income. The “Morningstar rating” will assist in comparing fund performance (after adjusting for risk and accounting factors) against the overall group of similar funds, with ratings divided as follows: --- TerraBKK

  • Funds in the top 10% of performance will receive 5 stars.
  • Funds in the next 22.5% will receive 4 stars.
  • Funds in the next 35% will receive 3 stars.
  • Funds in the next 22.5% will receive 2 stars.
  • Funds in the bottom 10% will receive 1 star.

Note: Fund ranking data for LTF mutual funds as of November 2017 from Morningstar Thailand.

Article by: TerraBKK Investment Tips
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