Investing Pro and dream of sustainable, transparent financial market in Vietnam

InvestingPro focuses on distributing fund certificates. Why has the firm chosen to invest heavily in this segment?

InvestingPro is a new name in the market, formed with the goal of providing effective and easily accessible investment solutions for individual investors. We see significant potential in the fund market, especially as more and more investors seek safe, transparent, and professional investment channels.

InvestingPro has chosen to focus heavily on distribution of fund certificates for three main reasons:

First, the trend of capital flow shift. The financial market is developing rapidly, and investors increasingly seek to diversify their portfolios to minimize risk. Fund certificates, with stable returns and expert management, are a suitable choice. Currently, fund certificates offer an average investment return of 7-10% per year, and many funds show outstanding performances, with annual returns exceeding 20%, even up to 35%.

Second, untapped potential. The funds are currently managing a total net asset value (NAV) of nearly VND68 trillion ($2.67 billion), equivalent to approximately 0.66% of the country’s 2023 GDP. This figure is still much lower than that in regional countries such as Malaysia and Thailand (about 11% and 28% of GDP, respectively). InvestingPro sees a significant opportunity in connecting individual investors with fund products, thereby enabling more systematic and efficient management of personal capital.

Third, application of technology in investment. InvestingPro has developed online platforms and applications to support fund certificate investment. We believe that combining technology with high-quality investment products will promote sustainable market growth. With a long-term vision, the firm aims not only to become a reliable bridge between investors and reputable funds but also to contribute to the overall growth of the financial market in Vietnam.

How do you assess the potential of the Vietnamese fund market? What are the advantages of investment funds compared to other types of investment?

In the context of a steadily growing economy and an expanding middle class, the demand for investment and wealth accumulation is surging. However, most individual investors still lack in-depth knowledge and time to effectively manage their own investment portfolios. This creates a significant opportunity for the fund market to develop robustly.

Firstly, the market’s potential comes from Vietnam’s low participation rate compared to regional and international markets. As of 2023, only 0.26% of the population had invested in fund certificates, while in the U.S., the figure was more than 52.3%. As financial literacy improves and fund distribution channels become more accessible, I believe there will be a stronger wave of participation in this market.

Secondly, with deposit interest rates remaining low, investment funds have become an attractive alternative, helping optimize returns on idle capital. Thirdly, the fund market is now becoming increasingly diverse, featuring equity funds, bond funds, and balanced funds, which cater to different risk appetites of investors.

Compared to other investment channels, investment funds demonstrate many advantages such as professional management, diversification to reduce risk, transparency, and easy participation.

2023 data showed that the percentage of investors in open-ended funds/ETFs relative to the population was only 0.26%, very low compared to the 9% of securities accounts. Why has the domestic fund market not yet attracted investors? Is it because the legal framework has not been developed to match its potential?

There are several reasons for this situation.

First, poor understanding of the market and investment habits. Most individual investors in Vietnam still prefer short-term investments, such as trading stocks themselves or saving in banks, rather than seeking out professional investment funds. In addition, many people lack information and understanding about the benefits of investing in open-ended funds, leading to hesitation or reluctance to participate.

Second, trust and transparency issues. Investor confidence in the financial market is still under development. Some investors remain concerned about the transparency of fund operations and the actual performance of funds. This requires funds to increase transparency, improve operational efficiency, and build long-term credibility in the market.

Third, the legal framework is not fully synchronous. Although the legal framework for the fund market has made significant progress, there are still areas that need improvement to match its development potential, such as the mechanisms for attracting retail investors and the limited tax incentives for fund investors.

Fourth, distribution channels remain limited. Currently, investment funds have not truly reached the general public. The distribution channels remain quite traditional and have not fully utilized technology and digital platforms to expand their customer base. Individual investors, especially the younger generation, need more convenient, transparent, and engaging investment solutions.

To ensure that the fund market develops in line with its potential, three key solutions must be focused on. First, we should raise awareness and financial education for investors, helping them understand the benefits of open-ended funds as a long-term, safe, and effective investment channel.

Second, it is necessary to improve policies and the legal framework to facilitate the operation of investment funds, and create additional mechanisms to support the fund market. Third, we need to promote technology and diversifying distribution channels, making it easier for all types of investors to access and invest in funds.

Vietnamese investors have traditionally preferred to invest on their own rather than through organized, professional investment channels. As a result, the investor base has been unsustainable. The Prime Minister’s Decision 1726 dated December 29, 2023 requires raising awareness and enhancing the capabilities of investors in the securities market. As a market participant, how do you assess this issue, and what are InvestingPro’s approaches to improve investor quality?

Decision 1726 is a timely and correct step, emphasizing the need to raise awareness and enhance the capabilities of investors. In my opinion, this is the core solution for developing a healthy, transparent and sustainable financial market. The reality is that when investors have the right knowledge and skills, and are introduced to professional investment channels, they can make better investment decisions and reduce the risks associated with unofficial investment methods.

As a company committed to accompanying and developing the fund market, we have been implementing the following specific solutions:

Focusing on financial education and awareness raising. InvestingPro has been rolling out educational content on financial literacy in various formats, such as articles and online videos, covering topics from basic to advanced investment knowledge. We help investors better understand the benefits of long-term investments, the risks of short-term trading, and the dangers of unconventional investment channels.

Developing transparent and accessible investment platforms. InvestingPro has built a modern and transparent technology platform where investors can easily explore reputable funds in the market, and track their performance, costs and effectiveness in a clear and straightforward manner.

Promoting professional investing through investment funds. We focus on community information activities to help investors understand that investing through funds is a safe and sustainable option, especially for those who lack time or experience.

Do you have any advice for investors in the new era - an era of "rising up" as the country's top leaders said?

Our country is stepping into a new era with opportunities for strong growth, thanks to a stable economic growth trajectory, deeper integration, and robust technological development. This is a very favorable time for investors to reassess their strategies and seize opportunities, but they must also be cautious about potential risks.

In this context, investors should focus on long-term and sustainable investments. The new era requires investors to have a long-term vision rather than chasing short-term profits, which often come with high risks.

Choosing sustainable investment channels such as open-end funds or diversified portfolios will help minimize risks and maximize returns in the long term. Especially, investors should pay attention to sectors that benefit from economic development trends, such as technology, clean energy, consumer goods, infrastructure, and industries linked to sustainable development.

They need to improve knowledge and develop a professional investment mindset. In the new era, knowledge and analytical skills are key to success. Investors need to cultivate financial knowledge, and explore professional and structured investment products. Instead of trying to quickly find opportunities that may come with high risks, they should consider choosing reputable investment funds, where experienced professionals manage and optimize portfolios.

It is necessary to manage risks and avoid investment traps. At any given time, risks always accompany opportunities. Investors must be cautious about opaque investment channels, new forms of fraud, and promises of "high returns with low risks." Diversifying investment portfolios and considering personal risk tolerance are essential to protect assets.