New Thai ESG fund on the horizon

With some THB180 billion in long-term equity funds now mature, Finance Ministry promotes alternative investment options

 

Thailand's Ministry of Finance is preparing to launch a new Thai ESG (Environmental, Social, and Governance) fund by March, hoping to attract up to 180 billion baht from maturing Long-Term Equity Funds (LTFs).

 

Lavaron Sangsnit, the ministry’s permanent secretary, explains that the new fund is designed to provide an alternative investment avenue for the substantial portion of matured LTF funds that remain unsold. Of the total 240 billion baht in matured LTFs, a considerable 180 billion baht is still awaiting reinvestment.
The move comes as the Thai capital market grapples with various challenges.  While investors are now eligible to sell their matured LTF holdings, many are hesitant due to average losses of 5-10%. The new ESG fund aims to offer a potentially more stable and responsible investment option during this period of market downturn.

 


“The investment structure and benefits are currently under discussion and may differ from the existing Thai ESG Fund,” Lavaron noted. “However, the focus remains firmly on domestic investment.”


 

The ministry is keen to expedite the process and expects to finalise the details by the end of the first quarter of this year, allowing investors to transfer their matured LTF holdings into the new fund.  The core principle of promoting long-term savings over a five-year period will be maintained.
  

The existing Thai ESG Fund, fully launched last year, has seen reasonable success, attracting 27 billion baht in investments.  This figure reflects a similar level of investor interest to traditional LTF purchases, which typically generate between 25 and 30 billion baht annually.  The Ministry will be hoping the new fund can replicate, and even surpass, this level of interest.

(2025/02/19-00:00)