Concerns regarding the new wave of COVID-19 outbreaks in England may lead the 'UK government' to consider another 'lockdown' to prevent further spread, compounded by the prolonged delay in economic relief policies from Congress.

This has resulted in significant 'turmoil' in the 'financial markets', with widespread sell-offs across all investment assets, including stocks, gold, and oil, while the dollar immediately strengthened.

Amidst the volatility of various investment assets, 'fund managers' recommend that investors 'diversify their investments' or 'Asset Allocation' appropriately to align with the risk tolerance of each investor.

At the same time, under the prevailing low-interest rate environment, 'risk assets' remain 'attractive' for the foreseeable future, as they can generate good returns for long-term investments in the New Normal world. Even though there is significant selling pressure on risk assets, market downturns present 'opportunities' for gradual investment.

'Theeranat Rujimethapas', Managing Director of TISCO Asset Management Company, advises that despite the current volatility in the stock market, it still has a 'future' over the next 6 to 12 months. With hopes for the development of a COVID-19 vaccine becoming clearer next year, market corrections present a good opportunity for long-term investments based on individual risk tolerance.

In this regard, for those with low risk tolerance, it is advisable to start with a 20% allocation in stocks and gradually increase the proportion based on risk tolerance. For those with higher risk tolerance, a stock allocation of over 50% is recommended, including both Thai and foreign stocks.

For Thai stocks, focus on selecting no more than 15 individual stocks according to the strategy of the TISCO Strategic Fund (TSF), which is suitable for the current market conditions. For foreign stocks, prioritize sectors that benefit from COVID-19, such as biotech, healthcare tech, and global tech, following the strategy of the TISCO Global Technology Equity Fund (TISTECH).

Additionally, the remaining investment proportion should still include bonds to maintain portfolio stability and investments in REITs to generate returns with a dividend yield of around 4% per year.

This portfolio structure, with a low-risk level and a 20% stock allocation, can yield an expected average return of 2-3% per year, which is still better than returns from deposits or bonds alone. In a high-risk scenario, with a stock allocation of 50% or more, an expected average return of over 5% per year can be achieved.

'Nawin Intrasombat', Deputy Managing Director of the International Investment Management Division at Kasikorn Asset Management, recommends a portfolio that 'focuses on protecting capital while aiming to generate returns from some stock investments.' This can be structured according to the 'K-FITM Fund', a mixed-asset fund targeting a 5.5% annual return, suitable for those with moderate to low risk tolerance.

The portfolio is divided into short-term bonds (29%), Thai stocks (25%), foreign stocks (25%)—including Chinese stocks (5%), Asian stocks (4.5%), Japanese stocks (4.5%), US stocks (4%), European stocks (4%), and Indian stocks (5%)—alternative assets (10%) such as gold (5%), infrastructure funds (3%), and real estate (2%), and bonds (11%) comprising medium to long-term bonds (9%) and foreign bonds (2%).

'Somchai Amorntham', Assistant Managing Director of Investment Strategy and Client Relations at Krung Thai Asset Management, suggests that the investment portfolio should consist of 54% stocks, with a focus on foreign stocks at 30%, particularly Chinese stocks, while Thai stocks should account for 24%. The remaining 38% should be in bonds, with 54% in stocks, 3% in gold, and 5% in real estate and REITs. This can yield good long-term returns of 5-7% per year, similar to the investment strategy of the Krung Thai Asset Management Fund (KTMEE-A), which maintains an aggressive investment style to accept higher risks for higher returns.

SOURCE : www.bangkokbiznews.com