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Exchange Traded Fund (ETF)

An Exchange Traded Fund (ETF) is an open-end fund listed on the Stock Exchange of Thailand (SET). An ETF can be traded as easily as a stock, but like an Index Fund it has a diversified portfolio and thus lower risk. ETFs also have lower management fees than other actively managed funds. ETFs may track many types of underlying asset such as Equity ETF, Bond ETF, and Gold ETF.

1. ThaiDEX SET50 ETF
2. ThaiDEX SET High Dividend ETF
3. ThaiDex SET100 ETF
4. KTAM SET50 ETF Tracker

   - ETFs can be traded real time via any broker, just the same as trading stocks.
   - The return on an investment of ETF is closely linked to the return on an underlying index.
   - An equity ETF holds a portfolio of securities such as the stocks in an underlying index.
   - The market price of an ETF will normally be close to the Intraday Indicative Value (IIV) due to arbitrage and the support of the market maker.

  • Buying an equity ETF is like buying the shares of many listed companies in a single transaction.
  • ETFs diversify risk by investing in a large number of underlying assets. For example the TDEX invests in 50 of the leading companies in Thailand covering sectors such as; Energy & Utilities, Banking, Construction Materials, Information & Communication, Technology, Transportation & Logistics, etc.
  • An ETF is similar to a stock. It’s easy to invest, as investors can buy or sell through any broker.
  • ETFs are transparent. The Fund Manager discloses the ETF’s holdings in a
    Portfolio Depository File (PDF) everyday.
  • Investors may use the Intraday Indicative Value (IIV) of an ETF to estimate its fair price. The IIV is an estimate of the real value of an ETF and is updated every 30 seconds by the Fund Manager.

Investors receive return on ETF through;

 Capital gain: Investors may receive a capital gain from the increase in the price of an ETF, this will correspond to the increase in the underlying index.

 Dividend: Investors may receive dividend whereby such dividend payment will not cause the fund to have an increase in accumulated loss in the interim accounting period.

For Retail Investors
ETF is a new alternative investment which diversifies your risk with a low minimum investment amount and a low management fee. ETFs are suitable for new investors who have little experience of securities trading.

For Institutional Investors
Institutional investors may choose to apply a core / satellite strategy using an index ETF as the core, and individually selected stocks as the satellites. ETFs can also be used for hedging or to gain rapid market exposure in the event of sudden or unexpected cash inflows.

   ETF Index Fund
Pricing Continuous pricing Day end pricing
Channel Brokers Asset Management Company & Selling Agent
Market / Limit / Stop Orders Possible Not possible
Buy on margin Possible Not possible
Management fee Low (~0.40 – 0.55 % p.a.) Low – Medium (~0.55 - 0.70 % p.a.)
Long-term investment Appropriate Appropriate

Investors can invest in ETF through;

ETFs are normal securities listed on the SET and therefore trade like other stocks. Investors may trade ETF through any broker.

  Investor Type : All types
  Trading Type : Buy / Sell on SET
  Min order : Board Lot (100 units)

For investors who want to buy / sell ETFs in large volume of 1 Creation Unit (CU) or more at a time, the buyer and seller agree the price and book the transaction as a Put-through trade.

  Investor Type : All types
  Trading Type : Put-through
  Min order : 1 CU and multiples thereof

For investors who want to create 1 CU or more, the investor must provide the underlying stocks in the ETF and cash balance as announced daily by Fund Manager. (Portfolio Depository File: PDF)
For investors who want to redeem 1 CU or more, the investor will receive the underlying stocks in the ETF and cash as announced daily by Fund Manager. (PDF)

Investor Type : Juristic Person
Creation : Send in PDF and receive ETF
Redemption : Send in ETF and receive PDF
Min order : 1 CU and multiples thereof
Fee : 0.05 % of value of 1 CU

Market Maker : MM
SET and the Fund Manager have appointed KGI (Equity Derivatives Dept) to be Market Maker to provide liquidity (both bid/offer) on the exchange. KGI now acts as Market Maker for TDEX and TFTSE.

Participating Dealer : PD
The Fund Manager has appointed KGI (Equity Derivatives Dept) to be a Participating Dealer whose function is to create / redeem ETF units directly with the Fund Manager. Investors may create / redeem ETF units only through PDs. KGI is a Participating Dealer for TDEX and TFTSE.

Broker :
KGI (Equity Sales Dept.) provides a brokerage service for clients who want to trade ETFs.  Investors can buy and sell ETF, just like they buy and sell any other stock.