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I’ve learn some inventory market individuals describe the Vietnam inventory market efficiency of 2022 as a “crash”. I don’t essentially agree with that description, however no matter phrases you employ, there isn’t any debating that the Vietnam inventory market has had a troublesome time within the first 6 months of 2022! On this weblog put up I needed to offer some context over how one ought to view this decline. I additionally needed to take a look at and see what number of distinguished Vietnam funds have carried out throughout this bear market.
IS THE VIETNAM STOCK MARKET CRASHING?
I imagine the falls in Vietnam shares witnessed to date in 2022 have to be seen in context that the market was one of many star performers in 2020 and 2021. That’s whether or not you need to decide it from a regional perspective, and even a complete globe perspective the place it nonetheless stood out as an excellent market.
It’s pure that traders could look to financial institution some earnings rapidly with the backdrop of the S&P500 additionally slipping comfortably into bear market territory in 2022. Particularly given many such traders had been new to the market, as we noticed an enormous surge in new retail account openings and retail turnover ranges. Due to this fact I wouldn’t regard this as “crash” like situations.
VIETNAM STOCK MARKET RETURNS 2022
I imagine inventory market traders typically ought to all the time be ready for the opportunity of market indices falling 50% at any time. Whereas over the primary 6 months of 2022, the Vietnam inventory market fell about 20%.
For frontier markets like Vietnam, one needs to be open minded for much more volatility, even perhaps falls of better than 50% if you happen to make investments on the improper time. If you happen to assume that sounds excessive, go checkout the Vietnam inventory market chart displaying the years round 2008.
HISTORY OF THE VIETNAM STOCK MARKET
The under hyperlink discusses all the historical past of the Vietnam inventory market spanning a bit over 2 a long time now. You may view there a chart of the large decline seen round 2008, greater than 70%!
VIETNAM STOCK MARKET HISTORY – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
WILL THE VIETNAM STOCK MARKET CRASH?
So what would I view as a “crash” within the Vietnam inventory market? Effectively if the market fell one other 20% from right here and in very fast style, then the crash time period is perhaps extra acceptable.
That might imply whole falls in 2022 of circa 40-50%, a situation I nonetheless imagine may be very unlikely. Primarily for causes I wrote about final yr, refer under.
WILL THE VIETNAM STOCK MARKET CRASH AGAIN? – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
I could possibly be improper although! Earlier I discussed inventory market traders typically ought to have the mindset the broader market indices may simply hunch 50%. If you’re an investor in frontier markets like Vietnam, it’s important to count on much more volatility and probably sharper drawdowns.
WHICH VIETNAM FUNDS PERFORMED BEST IN THE 2022 BEAR MARKET?
For now although let’s get straight to the desk under, displaying which Vietnam funds carried out one of the best because the Vietnam inventory market (measured by the VN-Index), slumped some 20% within the first 6 months of 2022.
| FUND NAME | FUND TYPE | % RETURN FIRST 6 MTHS 2022 |
|---|---|---|
| TCM Vietnam Excessive Dividend Fund | Lively unlisted open ended | -9.7% |
| AFC Vietnam Fund | Lively unlisted open ended | -10.1% |
| Vietnam Alternative Fund (VOF LN) | Lively listed closed finish fund (CEF) | -14.2% |
| Vietnam Holding Ltd (VNH LN) | Lively listed closed finish fund (CEF) | -16.0% |
| Lion World Vietnam Fund | Lively unlisted open ended | -16.4% |
| Amundi Vietnam Alternatives Fund | Lively unlisted open ended | -18.5% |
| TIM Vietnam Actively Managed Certificates | Lively unlisted open ended | -19.6% |
| Pyn Elite Fund | Lively unlisted open ended | -20.0% |
| Vietnam Enterprise Investments Ltd (VEIL LN) | Lively listed closed finish fund (CEF) | -20.1% |
| JP Morgan Vietnam Alternatives Fund | Lively unlisted open ended | -25.1% |
| Premia MSCI Vietnam ETF (2804 HK) | Passive ETF | -27.8% |
| Xtrackers FTSE Vietnam Swap UCITS ETF (XVTF LN) | Passive ETF | -28.3% |
| VanEck Vectors Vietnam ETF (VNM US) | Passive ETF | -31.9% |
To do the above verify on who had been one of the best Vietnam funds for 2022 when it comes to the primary 6 months efficiency, I went again to an older weblog put up of mine from final yr. I shall hyperlink to that additional down, the place I reviewed essentially the most well-known Vietnam funds, whether or not that be CEFs, ETFs or unlisted open ended managed funds.
To maintain issues simplified, the desk above I made a decision to not embody some unlisted funds from VinaCapital and Dragon Capital. I figured they’re already represented through VOF LN & VEIL LN respectively that are listed on the London Inventory Trade. These commerce at sizeable reductions to NAV so is perhaps the higher alternate options from these 2 fund managers.
COMPLETE GUIDE TO REVIEW OF ALL VIETNAM FUNDS FOR 2023
I’ll quickly confer with under to the older weblog put up final yr the place I attempted to dig up the information on all of the Vietnam funds I may discover. I wish to emphasize that simply serious about efficiency over the primary 6 months of 2022 will not be all that useful to guage if one ought to put money into a selected fund.
The rationale I needed to discover the efficiency on this transient 6-month time interval, was to see if it made me barely change my opinions I fashioned final yr. That’s, final yr after I tried to evaluate the extra longer-term deserves or in any other case of all the assorted Vietnam managed fund merchandise.
One more reason was to discover how funds had been performing in a down market. This yr has been fairly totally different from after I beforehand examined the funds. Final yr was coming off very robust Vietnam inventory market efficiency over all time intervals.
Because it occurs, my extra most popular Vietnam funds from taking a look at long term information final yr really additionally typically carried out higher than common within the first 6 months of 2022.
With the caveat that these could not swimsuit everybody, I believed that opposite to a whole lot of opinions I discovered on-line, that there have been preferable choices to the favored VanEck Vectors Vietnam ETF (VNM US). I believed that giant closed finish funds the place you may typically purchase at a 20% low cost to NAV had been comparatively extra enticing for bigger cap Vietnam inventory market publicity. I communicate of for instance Vietnam Alternative Fund (VOF LN) which is managed by VinaCapital, and Vietnam Enterprise Investments Ltd (VEIL LN), managed by Dragon Capital.
Some open ended managed funds I wrote positively about had been AFC Vietnam Fund which is managed by Asia Frontier Capital, and Pyn Elite Fund managed by Pyn Fund administration. AFC Vietnam Fund is smaller in measurement and will have extra upside potential if it has success figuring out smaller firms. Pyn Elite Fund has been round a very long time with excellent outcomes, and the fund supervisor is ready to take concentrated bets on his views.
For those who need to take into consideration what is perhaps their finest fund choices for Vietnam inventory market exposures heading into 2023 and past, my weblog posts from final yr is perhaps a helpful information. If you wish to return and skim my full Vietnam fund evaluations primarily based off what has occurred over longer time intervals, I’ve included the hyperlinks under to take a look at:
WHAT ARE THE BEST VIETNAM FUNDS TO INVEST IN? (OPEN ENDED) PT 2 – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
WHAT ARE THE BEST VIETNAM FUNDS TO INVEST IN? (OPEN ENDED) PT 1 – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
CONCLUSION ON HOW VIETNAM FUNDS NAVIGATED THE 2022 BEAR MARKET
In abstract trying on the efficiency desk of Vietnam funds for the primary half of 2022, I must say typically talking the lively funds (regardless of larger charges) had been the higher place to be invested.
Readers who’re solely skilled for instance with the US inventory market is perhaps considerably shocked at this. They is perhaps properly conscious that low charge index funds most likely do higher than their lively counterparts in 90% of instances over very very long time intervals.
But it does make some sense that this phenomenon might not be the case within the Vietnam inventory market. It stands to purpose that if frontier markets are much less environment friendly, and there may be much less competitors from lively fund managers, maybe they’ll justify their larger charge constructions in any case.
Is Vietnam funding?
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