Investing in Thailand – ETFs

ETFs are well known to offer the easiest way to invest. The costs are low, they offer immediate diversification, and they don’t require too much research. If your brain is already occupied with too many things and you don’t want to be bothered with additional decisions, this is the obvious way to get started.

The stock market of Thailand has not missed that trend, and there are several ETFs available for local investors. However, compared with brokers that I use in Europe, the selection is pretty limited.

At the time of writing this article, there are exactly 11 ETFs registered with the SET. 8 of them are focused on different types of assets, companies and industries within the SET, 1 is for bonds, and then we have 1 for Gold as a commodity and only 1 that traces one foreign market: China.

You can find the full list of available ETFs right here:
https://www.set.or.th/set/etfstatistics.do?language=en&country=US

Personally I like ETFs and recommend them as an easy long-term-investment-solution. I have set up a small stock account for my daughter, mainly to have some kind of starter fund for her when she moves out into the world, and this account consists of 4 ETFs:

  • 1 x ETF that focuses on high-dividend stocks on the SET
  • 1 x ETF for the overall Thai market
  • 1 x ETF focusing on small and medium companies in Thailand
  • 1 x ETF focusing on China

This ETF account is performing better than the stock account that I set up for my wife. Well, as we know, it’s hard to beat the market. Her stock account is however focusing on creating a monthly dividend income stream. This target can’t be achieved with only ETFs in Thailand.

Investing in Thailand – DIF.BK

Some trends are in plain eyesight and yet often disregarded by investors. This is especially true for digital infrastructure. While we often assume that things like 3G, 4G, 5G, wi-fi, broadband access, etc. are already everywhere, we are only scratching the surface of what this industry is about to grow into. From industry 4.0 to smart cities. This is a market that should not be missed in any investors portfolio. And one such a stock in Thailand to add is DIF.

DIF is the shortcut for Digital Infrastructure Fund, and the company does pretty much what the name says. Putting money into relevant infrastructure projects. Or as they describe it on their website HERE:

Digital Telecommunications Infrastructure Fund (DIF) (Previous Name: TRUE Telecommunications Growth Infrastructure Fund (TRUEIF)) is Thailand’s first telecommunication infrastructure fund offering opportunity for everyone to invest in telecommunication infrastructure which experiences constant growth and therefore allows investors to enjoy recurring incomes while simultaneously helps developing the sharing of telecommunication infrastructure. 

The Fund has been established with a view to raise funds from investors via both domestic and international offerings. The funds raised from the offerings will be used to invest primarily in infrastructure businesses, particularly in telecommunications infrastructure assets that cover the entire country such as telecommunication tower, fiber optic cable, transmission equipment, broadband system and/or incomes generated from the businesses.

Units of the Fund has been listed and traded in the SET since December 27, 2013.

This gives you a broad overview, but to go a little more into detail and which areas specifically are concerned, the fund is getting involved in the following sectors:

  • Railway or Pipeline Transportation
  • Electrical Grid
  • Waterworks
  • Road, Expressway, or Concession Way
  • Airport or Airfield
  • Deep Sea Port
  • Telecommunications or Telecommunication-Related Infrastructure and Communications
  • Alternative Energy
  • Water Management/ Irrigation
  • Natural-disaster prevention system including the alert and management systems to mitigate the intensity of such natural disaster
  • Waste Management

As we know, most of these areas in Thailand are under strict control and funding by the government, so the income is pretty reliable and the investment yield is high. At the time of writing these lines, the dividend yield is 8.35%.

Another cherry on top: This is one of the few stocks in Thailand that is paying a quarterly dividend. Every March, June, September and December this reliable dividend is being transferred to your account, and as we experienced over the last 2 years, it’s COVID-resistant.

A solid pick for passive income and hopefully another piece of the puzzle to reach financial independence.

Is it FIRE or just FI

This pandemic just keeps dragging on, and it’s very interesting to observe how people are handling it all across the globe. When things got started, Asia was on the forefront of effective handling of the pandemic. Vietnam, Thailand, Korea, Japan, Singapore. We managed here to keep infections and deaths on the low, as people were quick to adapt to protective measures and limitations on economic activity. Europe and the US were lagging behind, and there were frequent discussions on what the west can learn from the east in the future.

But now the tides have turned. While Europe and the US is on track to full recovery, here in Thailand I feel like we are back to where it all started. Lockdowns, economic restrictions. It’s like we got stuck somewhere along the way, and can’t find a way to move forward.

This is of course mainly due to the lack of efficient vaccines. Herd immunity is apparently not an option with this virus now circulating in the form of several diverse mutations, and our natural immune system not offering the long-term protection that would be required to keep infections at bay. To top it off, the SinoVac and SinoPharm vaccines aren’t working well, and the local production of AstraZenecca has stalled for whatever reason.

FIRE vs. FI

But let me stop here before I get political. My point is, that since this pandemic keeps dragging on and I am spending more time at home than usual, I realized a few things. One of those things is that I really don’t want to retire any soon. I like to work, and I miss having more action in my hotels, in my office, and spending more time with my guests. I like spending time with people, and the idea of retiring early and spending much more time on non-productive things feels a little less desirable after more than one year of Covid.

I know that there are thousands of people who don’t want to work at all. People who don’t want to report to anyone, to not depend on anyone, and to not being micro-managed by anyone. I am also fairly often at odds with myself over all these work-necessities, which make me sometimes feel not free, dependent, and all the negative notions that accompany these points.

But retiring early… honestly right now, it doesn’t seem for me like the right thing to do. I want to work. I might get out of the hotel business and do something else, become a consultant or stock analyst, turn to freelancing or whatever. But I am pretty sure that I will keep working for a long time to come.

So my goal changes from FIRE (Financial Independence Retire Early) to FI (Financial Independence).

It may not sound like much, but there is a significant point to it: Since I will keep working for a long time to come, I can be a little less frugal. I don’t need to maximize my savings all the time, because with a continuous stream of income from work, I have significantly more time to reach retirement. Striving “only” for financial independence first will give me the feeling of security and freedom that I want and need, while not thinking too much about retirement will take some stress and pressure out of the equation.

What’s the right thing for you?

Being financially independent offers a lot of options to do things that you actually want to do. If you don’t worry anymore about a low income, then you can start a new career, change your field of expertise or interest. Hell, you could even do an internship again in your 40s or 50s. Why not? It can open up some very exciting opportunities for you to learn more about the world, to pursue dreams which you set aside when you were younger due to financial concerns, or simply to just gain new perspectives. For me, this is absolutely “good enough”.

But of course, this means that hanging out on the beach all day and sipping Jim Beams with Coke will have to wait. That’s probably for the better anyway.