CSOP Asset Management has launched a new ETF in Hong Kong providing broad market exposure to Vietnamese equities.
The IMF forecasts that Vietnam will be one of the fastest-growing Southeast Asian economies over the next few years.
The CSOP FTSE Vietnam 30 ETF (3004 HK) has been listed on the Stock Exchange of Hong Kong with an annual management fee of 0.99%.
Ding Chen, CEO of CSOP Asset Management, commented: “Leveraging our time-tested ETF management expertise, CSOP is confident to introduce this Vietnam-themed ETF product to Hong Kong investors. We look forward to bringing more new concept ETFs to Asia with various cost-effective options for investors to diversify their portfolios.”
According to the International Monetary Fund, Vietnam was the only Southeast Asian country to achieve positive economic growth for the two most recent amid Covid-19.
The IMF also forecasts that Vietnam will be one of the fastest growing economies in Southeast Asia over the next few years, highlighting the country’s continuous inflows of foreign direct investment, stable domestic political environment, and favorable demographic structure as supporting factors.
Methodology
The fund tracks the FTSE Vietnam 30 Index by utilizing a combination of physical and synthetic replication methods.
The index comprises the 30 largest Vietnam-domiciled companies that trade on the Ho Chi Minh Stock Exchange. Constituents are weighted by market capitalization subject to a single stock cap of 10% in order to promote diversification.
As of the end of August, stocks from the real estate sector accounted for one-third (33.8%) of the index weight while food, beverage & tobacco companies made up around another quarter (22.5%). The next-largest sector exposures were banks (9.4%), industrial goods & services (8.9%), and financial services (8.0%).
Notable positions included Masan Group (11.3%), Vinhomes Real Estate Investment and Services Development (9.5%), Vingroup JSC Real Estate Investment and Services Development (9.5%), Vietnam Dairy Products JSC Food Producers (8.4%), No Va Land Investment Group Real Estate Investment and Services (8.3%), Hoa Phat Group JSC General Industrials (7.4%), and Joint Stock Commercial Bank for Foreign Trade of Vietnam Banks (4.8%).
The index returned 19% in 2020, which doubled to a 38% return in 2021, comparing favourably to the 0.9% loss and 26.1% gain for the broader FTSE Frontier Index over the same periods.
Vietnamese stocks have underperformed other frontier markets so far this year, however, with the index registering a loss of 22% (as of the end of August) compared to -14.5% for the FTSE Frontier Index.