I’ve learn some inventory market members describe the Vietnam inventory market efficiency of 2022 as a “crash”. I don’t essentially agree with that description, however no matter phrases you utilize, there isn’t a debating that the Vietnam inventory market has had a troublesome time within the first 6 months of 2022! On this weblog submit 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 outstanding Vietnam funds have carried out throughout this bear market.
IS THE VIETNAM STOCK MARKET CRASHING?
I consider the falls in Vietnam shares witnessed so far 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 choose it from a regional perspective, and even a complete globe perspective the place it nonetheless stood out as an incredible market.
It’s pure that traders could look to financial institution some earnings shortly with the backdrop of the S&P500 additionally slipping comfortably into bear market territory in 2022. Particularly given many such traders have been new to the market, as we noticed an enormous surge in new retail account openings and retail turnover ranges. Subsequently I wouldn’t regard this as “crash” like circumstances.
VIETNAM STOCK MARKET GROWTH 2022
I consider inventory market traders usually 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 ought to be open minded for much more volatility, even perhaps falls of larger than 50% if you happen to make investments on the incorrect time. If you happen to suppose that sounds excessive, go checkout the Vietnam inventory market chart exhibiting the years round 2008.
HISTORY OF THE VIETNAM STOCK MARKET
The beneath hyperlink discusses the whole historical past of the Vietnam inventory market spanning a bit over 2 a long time now. You possibly can view there a chart of the huge 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? Nicely if the market fell one other 20% from right here and in very fast style, then the crash time period could be extra applicable.
That might imply complete falls in 2022 of circa 40-50%, a situation I nonetheless consider may be very unlikely. Primarily for causes I wrote about final 12 months, refer beneath.
WILL THE VIETNAM STOCK MARKET CRASH AGAIN? – VIETNAM STOCK MARKET (vietnamesestockmarket.com)
I might be incorrect although! Earlier I discussed inventory market traders usually ought to have the mindset the broader market indices might simply stoop 50%. If you’re an investor in frontier markets like Vietnam, you need to anticipate much more volatility and doubtlessly sharper drawdowns.
WHICH VIETNAM FUNDS PERFORMED BEST IN THE 2022 BEAR MARKET?
For now although let’s get straight to the desk beneath, exhibiting which Vietnam funds carried out the very 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 test on who have been the very best Vietnam funds for 2022 when it comes to the primary 6 months efficiency, I went again to an older weblog submit of mine from final 12 months. I shall hyperlink to that additional down, the place I reviewed probably 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 embrace 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 Alternate. These commerce at sizeable reductions to NAV so could be the higher alternate options from these 2 fund managers.
COMPLETE GUIDE TO REVIEW OF ALL VIETNAM FUNDS FOR 2023
I’ll quickly consult with beneath to the older weblog submit final 12 months the place I attempted to dig up the information on all of the Vietnam funds I might discover. I wish to emphasize that simply enthusiastic about efficiency over the primary 6 months of 2022 just isn’t all that useful to guage if one ought to spend money on a specific 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 shaped final 12 months. That’s, final 12 months once I tried to evaluate the extra longer-term deserves or in any other case of all the varied Vietnam managed fund merchandise.
Another excuse was to discover how funds have been performing in a down market. This 12 months has been fairly totally different from once I beforehand examined the funds. Final 12 months was coming off very robust Vietnam inventory market efficiency over all time durations.
Because it occurs, my extra most popular Vietnam funds from long run information final 12 months truly additionally usually 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 lots 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’ll be able to usually purchase at a 20% low cost to NAV have 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 have 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 corporations. 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 could be their finest fund choices for Vietnam inventory market exposures heading into 2023 and past, my weblog posts from final 12 months could be a helpful information. If you wish to return and browse my full Vietnam fund critiques based mostly off what has occurred over longer time durations, I’ve included the hyperlinks beneath 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 usually talking the energetic funds (regardless of larger charges) have been the higher place to be invested.
Readers who’re solely skilled for instance with the US inventory market could be considerably shocked at this. They could be nicely conscious that low payment index funds in all probability do higher than their energetic counterparts in 90% of circumstances over very very long time durations.
But it does make some sense that this phenomenon will 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 energetic fund managers, maybe they’ll justify their larger payment buildings in any case.
Is Vietnam a superb funding?
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