VEIL boosts real estate holdings to 22% on Vietnam market confidence

Vietnam Enterprise Investments Limited (VEIL), the largest foreign-managed equity fund in Vietnam, has raised its allocation to real estate stocks to 22% of its portfolio, equivalent to $368 million, as of May, according to a recent disclosure.

This marks a notable rise from the 14-16% range earlier this year, while VEIL has reduced its exposure to other sectors such as banking, consumer goods, mining, and energy.

Vinhomes (HoSE: VHM) is VEIL’s largest real estate holding, accounting for 6.9% of the fund’s total assets.

VEIL, with $1.67 billion in assets under management, said it sees potential for improved earnings and profitablity of land banks held by property developers.

The fund’s portfolio recorded a 7.9% gain in May, with real estate stocks contributing 2.52 percentage points. Notably, 12 out of VEIL’s 13 real estate holdings outperformed the benchmark VN-Index, which advanced 9.1%. Both residential and industrial real estate stocks in its portfolio posted double-digit gains.

“The increases were supported by favorable policies, including accelerated infrastructure development and proposals to eliminate building permit requirements for new projects,” said Tuan Le, a VEIL representative.

Property stocks have surged 35% year-to-date, far outpacing VN-Index’s 4.7% rise. The sector has experienced four straight months of positive returns, peaking in May with a 25% jump.

While some profit-taking has emerged in early June, analysts remain optimistic. In a recent report, Mirae Asset Vietnam forecast that real estate stocks are likely to lead VN-Index gains in the short term, supported by legal reforms and improving market conditions.