Thailand’s Ministry of Finance has approved in principle the increase in the size of its latest Vayupak mutual fund by 100 billion baht (US$2.9 billion) to up to 150 billion baht, in a bid to stimulate the country’s flagging stock market.

The Stock Exchange of Thailand, which slumped 15% last year, is one of the worst performing markets in Asia. It has lost 8.4% so far this year. 

If all goes to plan, investors could begin purchasing units of the Vayupak 1 fund by September, with units priced at 10 baht each.

The new fund will be a closed-end fund open for sale to both retail and institutional investors. It will have a 10-year term and will include a minimum return guarantee similar to 10-year government bonds. Investors can expect to be paid returns twice a year. 

Lavaron Sangsnit, the permanent secretary to the finance ministry, earlier told local reporters that Vayupak Fund 1 will follow both active and passive investment strategies, and will invest in equities with “good returns, long-term stability, sustainable business practices and good corporate governance”.

At present, there are several existing Vayupak funds, including Vayupak Fund Type A worth 150 billion baht and Vayupak Fund Type B with a size of 350 billion baht.

The public, including retail investors, can purchase units of Vayupak Fund Type A, while Vayupak Fund Type B is fully owned by the finance ministry and state agencies.