Equity funds see biggest outflow in two years despite August market gains

Equity funds in Vietnam recorded their largest outflow in two years in August, according to data from financial data provider FiinGroup.

Out of 74 equity funds, 47 funds, including open-ended, closed-end and ETFs, faced withdrawals worth VND8.5 trillion ($321 million). Net inflows at the remaining 27 funds, worth only VND793 billion ($30.02 million), were not enough to offset the loss.

The total net outflow reached VND7.6 trillion ($287.67 million), the highest since August 2023 and even above the record in July 2024.

The heaviest pressure came from Fubon FTSE Vietnam ETF, K Vietnam Equity and VEIL. Dragon Capital’s ETFs – DCVFMVN30 (E1VFVN30) and DCVFMVN Diamond (FUEVFVND) – also saw large outflows, mainly from Thai investors cutting holdings through depositary receipts.

In August, Thai investors sold VND643.7 billion of DRs based on E1VFVN30 and VND938.4 billion of DRs based on FUEVFVND, accounting for 87% and 84% of the funds’ outflows. Most sales targeted large-cap stocks such as banks (ACB, VCB, TCB) and retailers (MWG).

In the past two years, equity funds have seen net withdrawals of nearly VND65 trillion ($2.46 billion), equal to 45% of foreign investors’ total net selling on the stock market, showing rising pressure despite positive market movements.

The VN-Index jumped nearly 12% in August, led by banking, securities and real estate stocks.

However, bond funds moved in the opposite direction. They posted a net inflow of VND759 billion ($28.76 million) in August, the third straight month of gains, though 41.7% lower than in July.

Over the past 12 months, bond funds attracted nearly VND6.5 trillion ($246.04 million), mostly domestic money. Large funds such as MBAM, ABBF and DCIP led the trend, with MBAM alone reporting over VND257 billion ($9.73 million) in August, the highest since its launch.

Fund managers also shifted cash holdings. In August, 21 out of 34 funds cut their cash ratios, reflecting more positive sentiment.

Big funds like VFMVSF, VLGF and DCDS reduced cash, while others such as VESAF and VOF raised cash for the second month to lock in profits.

On the stock side, MBB was the most bought stock by funds, reversing July’s selling. Demand came from PYN Elite, which raised its stake to 11.8%, and several ETFs. Smaller banks such as OCB, HDB and STB also attracted buying, with STB seeing PYN Elite increase its stake to 18.8%.

Meanwhile, TCB and ACB continued to be sold for the third month in a row, with TCB leading in net sales. SSI also returned to the top-sell list after two months of net buying.