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Jul 14, 2021 / 18:36

Investment funds win big on Vietnam stock market

Vietnam’s bright economic outlook remains a pull factor for foreign investors.

The strong rise of the local stock market in the first six months means high profitability for investment funds, including those from abroad.

 Investor at KIS Securities Company in Hanoi. Photo: Cong Hung

At the end of June, the benchmark Vn-Index set a new height at 1,408.55, representing a sharp rise of 27.6% against late 2020.

Market liquidity has also been surging to reach an average of over VND19.6 trillion (US$851.6 million) for 704 million shares changing hands per trading session, or an increase of nearly 200% in value and 106% in quantity compared to 2020.

In this context, the exchange-trade fund VinaCapital VN100 ETF posted a 38.5% increase in profit in the six-month period. Other funds under the Vietnam Capital Fund Management (VCFM) also recorded healthy profit, including the VinaWealth Equity Opportunity Fund (VEOF) (39.1%) and VinaCapital Insights Balanced Fund (VIBF) (26.6%).

VEOF and VIBF are among the top three performers in their respective groups, with the three funds’ accumulated asset value of over VND855 billion ($37.1 million) and around 6,000 investors.

Set up in mid-June 2020, the VinaCapital VN100 ETF seeks to replicate the performance of the Vn100 index, comprising the top 100 largest and most liquid stocks listed on the Ho Chi Minh City Stock Exchange (HoSE).

As of June 30, 80% of the fund’s capital have been invested in a diversity of fields from finance, real estate, to materials and consumer.

The DCVFM VNDiamond ETF, which holds a big volume of bank stocks, also recorded an impressive return on investment (ROI) rate at 53%, while VietNam Holding (VNH) posted its best business result yet with a 100% increase in ROI.

Such an amount helped maintained foreign investors’ net buying position at $410 million and contributed positively to the market development.

A recent report from the SSI Securities Corporation (SSI) revealed exchange-traded funds in Vietnam’s stock market attracted a net inflow of $590 million, a 2.6-fold increase compared to the amount recorded in the whole of 2020.

Experts said such strong performance from investment funds and the stock market overall came from the stable macro-economic conditions and its positive outlook.

Vietnam was among a handful of countries in the world posting a positive economic growth of 2.91% in 2020 and maintained its growth momentum at 5.6% in the first six months, in turn creating confidence among domestic and foreign investors.

In recent trading sessions when the Vn-Index continued its declining trend, with the largest plunge by over 50 points since January 28 that occurred on July 12, foreign investors continued their net purchasing trend with over VND1.4 trillion ($61 million) while their domestic peers looked to sell-off their stocks.