​KAsset recommends portfolio diversification to cope with COVID-19 crisis, expecting limited downside risk and easing conditions in Q3 20

​KASIKORN ASSET MANAGEMENT Co., Ltd. (KAsset) recommends investors to efficiently manage their portfolio to cope with the COVID-19 situation as gradual easing of the lockdown is being considered. Focus should be on portfolio diversification through investment in both risk and safe-haven assets proportionately. Investors are recommended to invest in fixed-income funds with high liquidity, whereas risk takers should use this opportunity to invest in equity funds, especially Super Saving Fund Extra (SSFX) as well as foreign investment funds (FIF) that focus on multiple assets. KAsset foresees that volatility will remain in the market, albeit with limited downside risk, and the dust could settle in the third quarter of this year as the economy gradually emerges from the doldrums.


Mr. Vasin Vanichvoranun, KAsset Executive Chairman, noted that the Thai financial market has been in a somber mood due to the COVID-19 crisis. As the situation has lately shown signs of improvement thanks to the government’s relief measures to combat the contagion and to reinvigorate the economy, the lockdown measures are expected to be gradually eased, and the economy is set to see a steady recovery. Both money and capital markets have recently recovered by more than 20 percent. Despite the highly volatile market, the company views that downside risks have become limited. KAsset thus recommends that investors set a long-term target, wherein investors with high risk appetite should focus on a variety of assets including risk and safe-haven assets so as to maximize the returns of the prevailing market. 

Mr. Vasin added that risk-averse investors should focus on fixed-income funds. Among the funds recommended by KAsset are K-CASH, which emphasizes high liquidity and low volatility; and K-FIXEDPLUS, which is suitable for investors who seek higher returns and can cope with volatility. Meanwhile, risk takers who want to cash in on the bearish stock market may increase their holding in equity funds, especially Super Saving Fund Extra (SSFX). A notable fund in this category is K-SUPSTAR-SSFX, which invests in stocks of financially sound companies while investors are entitled to extra tax savings of 200,000 Baht. The subscription period for K-SUPSTAR-SSFX is from now until June 30. For FIF, investors should consider investing in K-GINCOME, which diversifies investment in multiple assets around the globe while adjusting investment in accordance with changing market circumstances, and K-CCTV which focuses on listed companies in China which benefit from new economy, with steady portfolio adjustment to minimize volatility. Despite a highly volatile market over the short term, especially for high-risk assets like stocks, the company expects to see limited downside risk in the market. 

“KAsset has assessed that the duration of the global recession will hinge on how quickly the COVID-19 pandemic ends. We expect that the pandemic will end by at least 3Q20 if it can be controlled in 2Q20. If so, the global economy may make a U-shaped recovery in 2H20 because governments and central banks worldwide have been accelerating monetary policy easing to inject liquidity concurrently with economic stimulus measures via fiscal policy to shore up their economies. Investors, however, are advised to monitor factors affecting the global recovery, such as the COVID-19 infection tally, the duration and severity of lockdown measures of governments around the world, as well as the efficacy of economic stimulus measures from the governments and central banks worldwide”, said Mr. Vasin.

Mr. Vasin added that the Thai economy overall may continue to be pressured by the slowing global economy and benign inflation, while the COVID-19 pandemic will likely force the Bank of Thailand (BOT) to trim its policy rate to another record low. We expect that the BOT will cut its policy rate by another 0.25 percent with the aim of bolstering liquidity and stability in the debt market. Meanwhile, investors remain vigilant towards short-term volatility after the Thai capital market rose more than 20 percent compared to its recent low, while there has been frequent revision of operating results of listed companies. KAsset views that there is an investment opportunity for long-term returns if the Thai capital market declines going forward. We expect that the SET Index may touch 1,350 points by the end of 2020, based on an assumption that the COVID-19 pandemic can be controlled in 2Q20, while forward P/E ratio will likely stand at 15x in 2021. Growth in operating results of listed companies may contract roughly 20 percent YoY in 2020, but their operating results will likely resume growth in 2021.

Investors interested in KAsset’s funds can invest starting with 500 Baht via K PLUS, K-My Funds, KBank branches​ and selling agents. Investors can also request a prospectus from those channels. For more information, please call the KAsset Contact Center at 02-673-3888.

Investors should have a thorough understanding of the product, conditions of returns and risk before deciding to invest.