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Monitoring the Fund Performance

 

          Monitoring the fund performance is one of the crucial duties. It is the way to take care of your benefits. You can also use the performance to seek an investment strategy. The sources below can help you monitoring the fund performance.

 Biannual Report

          Every year the asset management company send you a
report within January and July. It contains the unit value that you could evaluate the fund performance.

 Unit Value

          Not only you can evaluate the fund performance of the current period with the previous one from the change of fund amount, but you can use the unit amount. This unit amount will also be used as a base to calculate the unit value.

 


   Unit value  =  Net asset value
                             Total unit amount

 

 


 Comparing the fund performance

          Concerning the fund performance that you are a member, you should compare the performance of your fund with others. The following are examples of how to compare your fund performance.

          
1. Comparing your fund performance of this period with the previous one
              Check the unit value of your fund in the biannual report in this period with the previous period. If the unit value increases, it shows a better performance. On the other hand, if the unit value decrease, it shows a bad performance. You should find out what is going on. What factor has affected the performance.

          
2.Comparing your fund performance with others
                Except for monitoring a change of unit value, you may compare your fund performance with other fund's performance having the same or similar investment policy. The easy way is calculating the return you've got in percentage from this formula.
 

 


  
 Current unit value - Unit value on the investment date  x 100
Unit value on the investment date

 

 


          
3. Comparing your fund performance with benchmark
                To enable fund members to compare fund performance accurately, a benchmark used should be a composit benchmark. It should be in line with the investment policy and calculated by data from the same period as that of the fund performance. The benchmarks can be classified by types of assets as follows:

Benchmarks for assessment of provident fund performance

Types of assets

Benchmarks

1. Equity

   SET Index Return  or
   SET 50 Index Return

2. Fixed Income
    2.1 Government bonds

 
 
ThaiBMA Zero Rate Return ZRR Government BondIndex which maturity is equal to target duration of portfolio  or
  Total Return of ThaiBMA Government Bond Index  in case where target duration of portfolio is not stipulated

    2.2 General bonds
          (government bonds + corporate bonds)

   ThaiBMA Zero Rate Return ZRR  Government Bond Index which maturity is equal to target duration of portfolio  or
   
Total Return of ThaiBMA Composite Bond Index in case where target duration of portfolio is not stipulated

3. Fixed deposit

    Average 1-year fixed deposit interest rate which provident funds shall obtain from BBL, KBANK, SCB and KTB for principal equal to 1 milllion bahts.

 

Example of comparing the performance of Fund A (Equity fund)

 

Fund A

SET Index

Dec 31, 2002

10.2379 baht

607.12 pts

Dec 31, 2003

11.2546 baht

658.24 pts

Return

11.2546 - 10.2379 x 100 = +9.93%
         10.2379

658.24 - 607.12 x 100 = +8.42%
        607.12


          From the above example, it may imply that the fund A investing in stocks 100% outperforms its benchmark (SET Index). This shows that fund manager's ability to manage fund is higher than average level.
         .
          
 For mixed funds, a benchmark of equity must be weighted by investment in stocks which is not less than average of minimum limit and maximum limit ((minimum limit + maximum limit)/2) which are prescribed in an investment policy.

 

Past performance of the fund is only one factor that reflects the management efficiency of the asset management company. It can not be used for guarantee the future performance.

    


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