Net outflows from Vietnam ETFs hit $758 mln, 12-fold 2023

Investors have net withdrawn VND18.9 trillion ($758 million) from exchange-traded funds (ETFs) active on the Vietnamese stock market in the year to August 16, according to Hanoi-based financial information platform FiinTrade.

The outflows, 11.8 times that recorded for the whole of 2023, were equivalent to 31.1% of foreign investors’ net sales on the local stock market during the period.

Total assets of both domestic and foreign ETFs reached VND65.1 trillion ($2.61 billion) in the week ending August 16, up 1.4% week-on-week.

Last week, ETFs in Vietnam saw outflows of VND691 billion ($27.7 million), marking the third straight week of net selling. Twelve of 22 ETFs monitored by FiinTrade saw net outflows.

Among these, foreign-run ETFs witnessed outflows of VND870 billion ($34.9 million). The most affected were the KIM ACE Vietnam VN30 ETF (with VND477.5 billion) and Fubon FTSE Vietnam ETF (with VND197 billion).

The iShares MSCI Frontier and Select ETF net sold VND97 million ($3,890) worth of Vietnamese shares during the week, two months after BlackRock announced the ETF's liquidation.

Meanwhile, the Xtrackers FTSE Vietnam ETF saw net inflows of VND69 billion ($2.77 million).

Analysts have attributed net outflows from the ETFs to the benchmark VN-Index of the Ho Chi Minh Stock Exchange (HoSE) falling below the psychological threshold of 1,200 points, followed by lukewarm trades.

Nguyen The Minh, head for retail research at Yuanta Vietnam Securities, ascribed the slower advance of the VN-Index compared with global markets to the smaller portion of tech companies.

Meanwhile, jitters came from the real estate and banking stocks that account for the lion’s share of the index, due to their poor performances and rising sour loans, respectively.

Looking ahead, Minh reckoned that investors tend to book profits on the markets that have rallied. Cash flows are likely to run to markets with low valuations and strengthening local currencies like Vietnam, he said.