Managing Rapid Change: A Shift in Fund Management Focus

The Government Pension Fund (GPF) is undergoing a significant shift in its investment strategy under the leadership of Songpol Chevapanyaroj, the newly appointed secretary-general. In an exclusive interview with the Bangkok Post, Mr. Songpol highlighted the challenges posed by the rapidly changing global economic landscape.

Traditionally, the focus of fund management was on maximizing profits. However, with the increasing frequency of crises and changes in the global trading system, the GPF is now seeking a balance between risk and return. Mr. Songpol emphasized the need for resilience to risk and the importance of adapting investments to suit the evolving environment.

As a large fund, the GPF is diversifying its investments internationally to achieve appropriate returns relative to the risks involved. The fund’s investment scope now includes various asset types and characteristics, with a focus on achieving a balance between profitable and loss-incurring investments over the long term.

Mr. Songpol highlighted the challenges of predicting market movements in today’s highly volatile markets and emphasized the importance of strategic asset allocation to manage risk effectively. The GPF is conducting a study on investment weighting to enhance resilience to risk over the next three years.

In terms of Thailand’s stock market outlook, Mr. Songpol noted that external factors are impacting the market, leading to discrepancies between stock prices and operating results of companies. The GPF is primarily focused on the SET50 index and believes that the market has likely passed the lowest point of the downturn.

Looking ahead, Mr. Songpol expressed optimism about the Thai economy’s gradual recovery post-pandemic, with positive signs in various sectors such as retail, manufacturing, and exports. The GPF is reviewing all its investments this year, considering geopolitical factors and the impacts of deglobalization to develop a new strategic asset allocation plan valid for 3-5 years.

Overall, Mr. Songpol emphasized the importance of resilience to risk and the need for a well-balanced investment portfolio to navigate the challenges of today’s rapidly changing economic landscape.