Sep. 18--MFC Asset Management will launch a small open-ended property fund next month.

It will be the country's first fund of property funds, meaning the fund will itself invest in property funds giving investors a diversified portfolio.

The new fund will be set at a relatively small size of 300 million baht given the limited supply of listed property funds in Thailand, said Supakorn Soontornkit, a senior executive vice-president.

Investment would focus on high-yielding, high-liquidity funds. MFC expects the fund to take positions in four or five property funds, each with a trading liquidity of at least a million baht per day averaged over the past three months.

Of the 25 property funds listed on the Stock Exchange of Thailand, funds that could qualify for investment include CPN Retail Growth, Samui Airport, Future Park, Q-House and the Ticon Property Fund.

"We may invest when the market timing is right and sell when prices rise. If supply is low, we may look for the right initial public offering to invest in," he said.

"But the property fund that we invest in must be one with sufficient liquidity. We expect to reshuffle our portfolio allocations on a regular basis."

MFC, meanwhile, still has plans to launch an overseas REIT (real estate investment trust) to facilitate local investment in overseas property.

Dr Supakorn said the fund, expected to be Thailand's first, could be structured as a REIT exchange-traded fund.

Meanwhile, MFC is relatively neutral on the overall market, considering that the SET index has already risen by more than 57 percent for the year to date.

In the short-term, the index could see a technical correction of 5 percent to 6 percent, with the index falling to around 680 as investors lock in gains from earlier this year.

"We should not see a sharp correction so long as underlying economic data continue to be positive," he said.

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