Viet Nam's exchange-traded funds (ETFs) were among the three best performing in the world in the first three months of this year, along with Egypt and India, according to the ETF Trends report issued by the asset managers at Global Trends Investments.
The Market Vectors India Small Cap Index ETF topped the list of best performers in the first quarter, with an increase of 39 per cent in its net asset value (NAV), closely followed by Market Vectors Egypt Index ETF with a rise of nearly 34 per cent.
Market Vectors Viet Nam ETF (VNM), managed by Vaneck Global and with about 70 per cent of the fund allocated to Vietnamese corporations, ranked third. VNM witnessed a growth of around 30 per cent in NAV through March, largely recovering from a loss of 47 per cent last year.
Most of the shares in its portfolio climbed in value, of which shares of insurer Bao Viet Holdings (BVH) doubled in price. The fund's investment in Sacombank (STB) and Vietinbank (CTG) also contributed to its increased investment value. During the quarter, VNM bought 17 million STB shares worth US$20 million and an additional 5 million shares of CTG worth $8.5 million.
VNM's assets under management of VNM on Friday stood at US$306.1 million, according to the New York Stock Exchange Arca.
Emerging market ETFs could present investors with significant rewards, if they can handle the possible risks, Global Trends Investments president Tom Lydon said on the ETF Trends website. He said that risks facing Viet Nam included rising inflationary pressures, liquidity issues within the banking system and a growing trade deficit.
The London Stock Exchange-listed FTSE Viet Nam Index ETF, managed by Deutsche Bank, also enjoyed a high growth rate in the first quarter, with assets under management rising 47.6 per cent from $190 million to $281 million. The fund decreased its stake in real estate developer Vincom (VIC) from 24 per cent to 14 per cent, while adding 2.5 million STB shares to its portfolio.