Investment funds’ stock high as VN-Index posts strong gains

The robust performance of Vietnam’s benchmark VN-Index so far this year has significantly boosted the net asset value (NAV) of many investment funds.

SSIAM VNFin Lead ETF has seen its NAV/CCQ (net asset value/fund certificate) soar 33.31% as of August 4, 2023 from the beginning of the year. ETF SSIAM VNX50, a fund in the same group, posted an impressive 24.77% boost in the same period.

The stocks in their portfolios have driven the VN-Index’s strong gains in the past seven months.

Another investment fund with an impressive showing is FTSE Vietnam All-Share. As of July 31, 2023, the fund's NAV had risen 20.2% over the previous three months and 23.6% since the beginning of the year. The top five stocks held by the fund are VHM of real estate developer (up 8.26%), HPG of steel giant Hoa Phat (8.05%), VIC of Vingroup (6.79%), VNM of Vinamilk (5.65%), and MSN of Masan Group (5.6%).

Meanwhile, in its latest report, Vietnam Enterprise Investments Limited (VEIL) has reported that its NAV as of August 3, 2023 had surged 18.2% from the year’s beginning. VEIL's objective is to invest in stocks that can do well in the medium and long term.

Lumen Vietnam Fund said that its NAV at the end of July 2023 had soared 23.24% since the beginning of the year. The fund aims to achieve above-average long-term returns by promoting environmental, social and corporate governance (ESG) based investments. The fund invests at least 51% of its assets in stakes and stocks issued by companies in Vietnam or those with principal operations in Vietnam.

Large-cap stocks in the Vietnamese market account for 54.95% of Lumen Vietnam Fund's total NAV, including VHM (8.26%), HPG (8.05%), VIC (6.79%), VNM (5.65%), MSN (5.6%), and FPT of FPT Corp. (5.3%).

Pyn Elite Fund has also seen its NAV go up 12.86% from the year’s beginning. It mainly holds blue chips like STB of Sacombank, VHM, CTG of VietinBank, and VRE of Vincom Retail.

Meanwhile, the VinaCapital Vietnam Opportunity Fund (VOF) reported that its NAV had expanded 3.5% in June and 10% since the beginning of the year. It has seen its NAV rise by 43.7% and 38.7% in the last three years and five years, respectively.

With most investment funds preferring blue chips, large-cap stocks, or those with good fundamentals and business results, tickers in the VN30 basket always appear prominently in their portfolio.

Optimistic outlook

In a recent letter to investors, Petri Deryng, founder of PYN Fund Management and portfolio manager of the PYN Elite Fund, said that the Vietnamese stock market was still in an uptrend as interest rates have dropped significantly in the first months of the year, creating fresh impetus for Vietnam's economic growth next year.

Pyn Elite Fund expects interest rates in the third quarter of 2023 at around 6% and as a result, earnings of listed companies will accelerate and the reallocation of capital back to the stock market will continue.

Meanwhile, VOF has said that Vietnam's stock market remains attractive to investors who believe in its long-term growth potential.

The income outlook in 2023 has reduced somewhat due to the effects of many factors including macroeconomic instabilities, shrinking demand and falling production. Some studies have shown that the market can maintain an earnings growth rate of around 9% this year, paving the way for a strong recovery in 2024 to reach 25%.

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), closed the August 4 session at 1,225.98 points, an increase of nearly 21.4% from the beginning of the year. According to financial services firm StockQ, Vietnam's stock market ranks 11th among the world's fastest growing indexes.

The market's recovery has been aided by the central bank’s easing of its monetary policy, sharply cutting policy interest rates; as well as a series of measures taken by the government to remove bottlenecks in the economy, promote public investment and reduce taxes or allow deferred tax payments.