AJF launches ThailandÆs first online mutual fund service

Other asset managers are likely to follow as mutual funds gain popularity with retail investors.

Ayudhya Jardine Fleming Asset Management (AJF) has launched a new internet service in Thailand to cater for what it sees as a growing number of mutual fund investors turning to the internet.

AJF is a joint venture of the Bank of Ayudhya, Thailand’s fifth largest bank, and JF Asset Management, one of Asia's largest investment management companies. Its new service is called AJF @ccess and Reungvit Nandhabiwat, managing director of AJF, claims it is the first internet-based mutual fund service ever unveiled in Thailand.

Mutual funds were only introduced into Thailand in 1992 and rapidly became popular after the financial crisis of 1997. According to the Securities and Exchange Commission, as of March 31 this year there were 257 registered mutual funds in Thailand with net asset value (NAV) of  Bt350.5 billion ($8.1 billion).

In an interview earlier this year the investment chief at Bank of Asia Asset Management, Adisorn Sermchaiwong, said that the amount of managed fund money in Thailand is less than 10% of total bank deposits. As this percentage was very small compared to other newly developed countries he claimed there was huge potential for the market going forward.

This is certainly true if the growth rate seen over the past three years continues. Statistics from the Association of Investment Management Companies (AIMC) show that, for example, AJF's funds under management increased from Bt1.4 billion in July 1997 to Bt52 billion in September 2000. According to AJF this makes them the fastest-growing asset management company in Thailand in the past two years.

Off-line wait

AJF @ccess allows unit holders of any of AJF’s five funds to inquire about mutual fund information, sell, buy, switch their investment units and immediately recheck their transactions. “At AJF, we are keen to respond to smart investors who are more and more turning to the internet,” says Reungvit.

But unit holders in a rush to use the service to deal with their investments will have to sign up in a decidedly old-fashioned way - going to a branch, filling in an application form and letter of authorization for the debiting bank account and waiting up to two weeks for their password to be sent.

In the meantime they can continue to use the telephone-based Interactive Voice Response (IVR) system, a popular channel for many financial institutions in Thailand where internet penetration is still quite low. AJF @ccess uses the same infrastructure as the IVR system for executing sell, buy and switch orders so offering the new access channel over the internet doesn’t require a huge outlay. With this being the case it’s likely that other asset management companies in Thailand with IVR systems will soon also be offering the same functionality that AJF offers over the internet.

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