BlackRock to liquidate Vietnam-focused ETF

BlackRock, the world’s largest asset manager, has announced the liquidation of the iShares Frontier and Select EM ETF, which heavily invests in Vietnamese equities, after 12 years since the fund’s inception.

BlackRock currently expects that the fund will cease trading and no longer accept creation and redemption orders after market close on or around March 31, 2025, the New York-headquartered investment firm said in a recent announcement.

However, this date is subject to change, it noted.

During the extended liquidation period, the fund will not be managed in accordance with its investment objective and policies, as the fund will sell down its assets.

Proceeds of the liquidation are expected to be sent to shareholders on or around three days after the last trading date, according to the announcement.

The iShares MSCI Frontier and Select EM ETF specializes in investing in frontier and emerging market equities. It was formerly known as the iShare MSCI Frontier Markets 100 ETF, tracking the MSCI Frontier Markets 100 Index.

In March 2021, the ETF changed its name to the current one and adopted the MSCI Frontier & Emerging Markets Select Index as the underlying index.

As of June 10, its net asset value (NAV) was $425.6 million, with exposure to Vietnamese assets accounting for circa 18%, or $76 million, the largest among constituent markets. Romania came second with 8.75%, followed by Kazakhstan with 7.76%, and Morocco with 4.34%.

The biggest holdings of Vietnamese equities are Hoa Phat Group (HoSE: HPG), Vinhomes (HoSE: VHM), Vingroup (HoSE: VIC), Vinamilk (HoSE: VNM), and Masan (HoSE: MSN).

Before the liquidation announcement, Vietnamese equities often accounted for the heaviest weight in the EFT’s NAV, reaching 28.5% as of end-March. Investors have net withdrawn some $38 million from the ETF in the year to date, following a net outflow of $97 million last year.

It has registered NAV total return of 8.45% in the year to date, following 9.8% in 2023 and -25.9% in 2022.

Foreign investors have been continuously net selling Vietnamese shares since early 2023. They had net sold VND39,987.8 billion ($1.57 billion) on the Ho Chi Minh Stock Exchange (HoSE) in the year to June 11, exchange data shows.