27th March 2014

Never Too Late

Global high-yield bonds gain popularity in Thailand, but retail investors so far sidelined

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Never Too Late


As a product that is barely a year old, Accredited Investors High Yield Bond (AI HYB) funds are still in the process of gaining acceptance among investors in Thailand.

At present, these funds can only be sold to institutions and high-net-worth individuals, feeding their appetite for risk. The funds have also gained traction due to their short durations and exposure to global bond fund themes

The next step could be to widen the customer base to include retail investors. “With enough acknowledgement and acceptance from the public, the ideal development in the next stage is for AI HYB funds to be allowed for mass retail purchase,” says Alec Ng, an analyst with Cerulli.

Even if the customer base is not expanded to include retail investors, the high-yield bond market in Thailand is set to continue developing at a rapid pace in 2014. In January alone, 13 AI HYB funds were launched and there are even more funds being registered.

“This product could end up becoming a mainstay of the Thai mutual fund industry, like property funds and equity trigger funds,” says Yoon Ng, Asia Research Director with Cerulli.

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