Index Fund Performance for THD
Versus Benchmarks for
Mature and Emerging Markets
As with budding markets in general, the bourse in Thailand is wont to thrash around a lot more than those of the mature regions. For this reason, the volatility of the market is as important as the return on investment in sizing up the corresponding fund.
On the upside, THD has turned in a rousing performance over the past few years in spite of the stormy weather kicked up by the financial crisis of 2008 and its aftershock. On one hand, the index fund crumbled more than the broad benchmarks of the emerging markets as a whole. Despite the smackdown, however, THD regained its vigor in short order and continued to trudge higher in the years to follow.
From a larger stance, the benchmarks of the emerging regions have been unable to recover fully from the pounding they received during the financial flap. As a result, the tracking funds for the sprouting markets have lagged behind the foremost benchmark of the bourse used by professional investors.
Despite the poor showing of the emerging regions in general, Thailand has managed to outshine its peers. Granted, the stock market did encounter a number of setbacks along the way. A case in point was the takedown prompted by the crash of the American bourse in the autumn of 2011.
By contrast to their usual behavior, the emerging regions as a group have fared worse than the U.S. market in recent years. Even so, Thailand has turned out to be one of the bright spots on the global stage.
In short, the exchange traded fund for Thailand has turned in a sparkling performance since the financial crisis and its fallout. On one hand, THD has been somewhat more volatile than the broad-based vehicles for the emerging regions; in particular, the index funds sporting the labels of EEM and VWO. In line with their usual behavior, the latter vehicles were in turn more flighty than the flagship pool for the mature markets; namely, the tracking vehicle known as SPY.
On the bright side, though, the exchange traded fund for Thailand has outpaced SPY by a hefty margin over the span of half a decade, and likewise for the past few years. Given this backdrop, many an investor would have done well to trade off a modicum of turbulence in return for the windfall turned in by THD.
NOTE: The full briefing is a document in PDF form, available for online reading or offline download. The report, listed under the title of “Thailand ETF Review for a Top Stock Market in Asia”, resides at the Library at MintKit Core.