Fund management market accounts for 5 per cent of GDP

The size of the fund administration market accounts for round 5 per cent of GDP, thus there may be nonetheless a lot development potential in 2022.

This implies the overall worth of belongings below the administration of fund administration remains to be modest in comparison with some international locations within the area corresponding to Thailand at 38 per cent and Malaysia at 50 per cent.

By 2030, the dimensions of the fund administration market is forecast to succeed in 6-10 per cent of GDP.

Because the inception of the primary fund administration firm in 2003, the variety of funding funds has elevated sharply to 70 funds.

The authorized framework for the operation of fund administration firms and funding funds has been constantly improved together with new varieties of funds corresponding to open-ended funds, ETFs and actual property funds.

In accordance with many consultants, fund administration and asset administration actions in developed international locations have change into an efficient funding channel and contribute to the sustainable growth of the inventory market. They mentioned investing by the funds lowered dangers for buyers.

On the Pho Tai Chinh (Monetary Road) Talkshow programme, Nguyen Quang Lengthy, deputy director of the Fund Administration Division below the State Securities Fee (SSC) mentioned that the overall worth of belongings below the administration of fund administration firms in Viet Nam reached roughly VND570 trillion (US$24.7 billion) as of December 31, 2021.

From 2015 to the tip of 2021, on common every year, the dimensions grew about 15- 25 per cent. Notably in 2021, this market grew past the common threshold and reached 31 per cent.

At present, there are 43 energetic fund administration firms. The market has 70 securities funding funds and in 2021 alone, 14 funds had been established. The full preliminary mobilised capital of those 14 funds was VND1.5 trillion.

Lengthy attributed this growth to 2 components. The primary was that the fund administration firms themselves had enhanced administration and human sources capability.

Second, banks’ reducing rates of interest was the driving power for the fund administration market and fund administration firms to have a stronger growth market.

Nguyen Phan Dung, deputy common director of SSI Fund Administration Firm (SSIAM), mentioned that in 2021, the inventory market flourished together with the expansion of funds. The permission to ascertain open-ended funds and ETFs in the marketplace has met the wants of the market.

“Every particular person solely has sufficient time and data to review about 5 to seven shares, or a most 15 shares. When taking part within the inventory market and for long-term advantages, it’s preferable to spend money on medium and long-term channels corresponding to shopping for fund certificates,” he mentioned.

“In inventory markets within the Asian area, buyers are inclined to take part straight in shopping for and promoting particular person shares. Nevertheless, within the European – American markets, in addition to taking part in self-trading, nearly all of buyers additionally plan to allocate a part of their funding portfolios to securities funding funds.

“Viet Nam will comply with the pattern of investing in respected funds to scale back dangers. Viet Nam’s center class will improve sharply within the subsequent 10 years, presumably as much as 30 million folks. When the financial system develops to a brand new stage, monetary planning for people and households will obtain extra consideration.

“Within the historical past of the world fund administration market, there have been instances the place fund administration firms went bankrupt and buyers misplaced all their cash. Nevertheless, present authorized laws are strict in separating belongings of fund administration firms and people of buyers. All belongings have to be deposited at a financial institution. These belongings are monitored by a custodian financial institution. Due to this fact, in case a fund administration firm is liable to chapter, the buyers’ belongings are nonetheless ensured,” he mentioned.

Dung mentioned that the revenue ratio was vital. Fund administration firms should proceed to enhance this ratio in direction of a extra sustainable route. Digital transformation utilizing on-line instruments can be a pattern and coaching for buyers have to be targeted on.

“Viet Nam now has a comparatively big selection of merchandise. Nevertheless, in every phase, there may be nonetheless giant room to develop corresponding to with open-ended funds, ETFs or pension funds,” he mentioned. 

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