thailand invest guide
Investing & Retirement

How to invest in Thailand

May 16, 2024 - Dan Urner

Are you considering an investment in the Thai stock market? Find useful information in this moneyland.ch guide.

For many Swiss, Thailand is primarily a holiday destination. But some investors also look at the Southeast-Asian country as an investment opportunity. This guide provides useful information about how to invest in Thailand.

What makes Thailand interesting for investors?

Thailand is a growth market. Its economy has grown rapidly in recent years, to where the Southeast-Asian country is now considered an emerging economy rather than a developing country.

From an investment perspective, Thailand’s stock market also provides a way to diversify your portfolio. In most global stock indexes, Thailand only has a very meager weighting, if it is included at all. In the FTSE All-World Index, for example, the Thai stock market only makes up 0.19 percent of the index (as of April, 2024). Investing in the Thai stock market can help to iron out geographic imbalances in your portfolio.

Which indexes track the Thai stock market?

The best-known indexes are the SET 50 and the SET 100, which track the 50 and 100 biggest stocks listed on the Stock Exchange of Thailand (SET) respectively. The stocks are selected and weighted based on their market capitalization. Both indexes are most widely known in their price index versions. However, performance index versions of both indexes are also published.

For investors in Switzerland, the MSCI Thailand index is particularly important because there is an exchange-traded fund (ETFs) domiciled in Luxembourg which tracks that index (more on this below). This price index published by US financial services provider MSCI tracks the performance of the 35 biggest Thai companies (based on market capitalization). It represents around 85 percent of the country’s market capitalization. The ten biggest stocks make up around 60 percent of the index (as of April 2024).

Table 1: The ten heaviest-weighted stocks in the MSCI Thailand

Stock Industry sector Index weighting
PTT Energy 8.46%
CP All Retail 8.42%
Bangkok Dusit Medical Services Healthcare 8.09%
Airports of Thailand Air traffic, infrastructure 7.01%
Advanced Info Service Telecommunication 5.89%
Delta Electronics (Thailand) Electronics 5.47%
PTT Exploration & Production Energy 5.45%
Siam Cement Multiple sectors 4.87%
Bumrungrad Hospital Healthcare 3.66%
Central Pattana Real estate 3.22%

Information as published by service providers on April 30, 2024 and recorded by moneyland.ch on May 15, 2024.

How can I invest in the stocks of Thai companies?

You can invest in Thai stocks using a stock brokerage account from a Swiss bank. An easier way to diversify your investment across multiple Thai stocks is to invest in an exchange-traded fund (ETF) that, in turn, invests in all of the stocks tracked by a Thai stock market index. ETFs are traded on stock exchanges just like stocks, and you can buy or sell shares in ETFs at any time during trading hours using your stock brokerage account.

Which fees should I pay attention to when using ETFs?

The cost of using ETFs to invest depends on how high the fees charged by the fund managers are. These fees are shown as the total expense ratio (TER). Additionally, you also need to account for the brokerage fees charged by your bank for buying and selling ETF shares, and the custody fees that your bank charges to hold your ETF shares.

Which ETFs can I use to invest in Thailand?

There are a number of ETFs that investors in Switzerland can use to invest in Thai stock market indexes (see Table 2).

Table 2: Selection of ETFs that track Thai stock indexes

ETF ISIN Domicile TER Dividends Replication
SET 50
ThaiDEX SET50 ETF THSE50070002 Thailand 0.40% Distributing Physical
SET 100
BCAP SET100 ETF TH8092010009 Thailand 0.69% Distributing Physical/
optimized sampling
MSCI Thailand
Xtrackers MSCI Thailand UCITS
ETF 1C
LU0514694701 Luxembourg 0.50% Accumulating Physical
iShares MSCI Thailand ETF US4642866242 USA 0.59% Distributing Sampling
BCAP MSCI Thailand ETF TH6861010002 Thailand 0.69% Distributing Physical/
optimized sampling

Data as published by service providers. Date: April 26, 2024.

Apart from the ongoing fees (TER), you should also pay attention the fund domicile and the way in which the ETF replicates the underlying index. Luxembourg is a more attractive domicile than the United States and Thailand because it has a favorable double-taxation agreement (DTA) with Switzerland. You should also prioritize ETFs with physical replication because they actually own shares in the stocks tracked by the index, rather than using synthetic replication methods like swaps. This increases the security of your ETF investment. You can find more information in the moneyland.ch checklist for choosing an ETF.

What are the risks of investing in Thailand?

Investing in securities like stocks and ETFs always comes with risks. There is never a guarantee that stocks will gain in value, and major losses can never be ruled out. In additional to these general stock market risks, there are a number of other risks that apply to investing in Thailand:

  • Currency exchange risks: Thai stocks are denominated in Thai baht. If Thailand’s currency loses value against the Swiss franc, that devaluation will negatively impact your real returns in Swiss francs.
  • Political risks: Thailand has historically been unstable politically, and the Fragile States Index gives the country a warning designation. Political tensions can potentially have negative effects on the value of your investments.

How high are the returns from Thai stocks?

A ten-year historical comparison of the most important Thai stocks indexes and the performance version of the Swiss Market Index (SMIC) shows that the main Swiss stock index is the clear winner in terms of performance in Swiss francs. That is partially due to the devaluation of the baht against the franc. The results can vary substantially depending on the timeframe used for the comparison. It is also important to understand that past performance is never a clear indicator of future gains. There is no sure way to predict how stock prices will develop in the future.

Table 3: Performance comparison of Thai stock market indexes and the SMIC

Index Country 10-year Performance in CHF (2014-2024)
SMIC Switzerland 84.49%
MSCI Thailand Thailand 8.58%
SET 100 Thailand 7.58%
SET 50 Thailand 6.56%

The comparison is based on the performance index versions (dividends accounted for) of all indexes. Dates: April 25, 2014 and April 25, 2024. Source of index performance and currency exchange rate data: Investing.com. Date: April 26, 2024.

Disclaimer: Information in this article is provided for education purposes only, and should not be considered investment advice.

More on this topic:
Compare Swiss stock brokerage accounts now
How to invest in the SMI
How to invest in the SPI
How to invest in the NASDAQ
How to invest in global stock indexes

Editor Dan Urner
Dan Urner is editor at moneyland.ch.
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