Vietnam has undergone dramatic shifts in recent decades as the country evolves from a command economy to a market economy. Many investors have looked at emerging markets such as Vietnam as an area of potential investment.
Vietnam’s economic growth slowed to approximately 2.6% in 2021 after rising more than 2.9% in 2020, according to the country’s General Statistics Office (GSO). So far in 2022, the country has rebounded strongly from the COVID-19 pandemic. The World Bank forecasts 7.5% growth for all of 2022.
One way that investors can gain exposure to Vietnam’s economy is by investing in a Vietnam-focused exchange-traded fund (ETF). Doing so can offer increased diversification, helping to protect against idiosyncratic risk. Some of the largest companies in Vietnam include Hoa Phat Group JSC (HPG) and No Va Land Investment Group Corp. (NVL).
- Vietnamese equities underperformed the broader U.S. market over the past year.
- The best (and only) Vietnam exchange-traded fund (ETF) is VNM.
- Its top three holdings are Vinhomes JSC, Vingroup Joint Stock Co., and Hoa Phat Group JSC.
There is only one distinct ETF trading in the U.S. that is dedicated to the Vietnamese equity market. Vietnamese equities, as measured by the MSCI Vietnam Index, have underperformed the broader market with a total return of -20.3% over the past 12 months, compared with the S&P 500’s total return of -11.0%, as of Sept. 1, 2022. The best-performing (and only) Vietnam ETF is the VanEck Vietnam ETF (VNM). We take a closer look at this fund below. All numbers below are as of Sept. 2, 2022. In order to focus on the fund’s investment strategy, the top holdings listed for ETFs in our listings exclude cash holdings and holdings purchased with securities lending proceeds except under unusual cases, such as when the cash portion is exceptionally large.
VanEck Vietnam ETF (VNM)
- Performance Over One-Year: -23.8%
- Expense Ratio: 0.59%
- Annual Dividend Yield: 0.34%
- Three-Month Average Daily Volume: 212,452
- Assets Under Management: $381.1 million
- Inception Date: Aug. 11, 2009
- Issuer: VanEck
While some emerging market ETFs own Vietnamese equities, VNM is the closest thing to a pure play. The fund tracks the MVIS Vietnam Index, which reflects the performance of the largest and most liquid companies that operate in Vietnam. VNM is a multi-cap ETF that invests in equities of various market capitalizations. Like its index, it includes companies that are both domiciled in Vietnam and elsewhere, but that generate at least 50% of their revenue from Vietnam. More than 82% of the fund’s holdings are of companies domiciled in Vietnam. Companies based in Taiwan, South Korea, Japan, and Malaysia are also represented. Real estate has the largest sector weighting in the fund, followed by consumer staples and financials. VNM follows a blended strategy, investing in both growth and value stocks. Below, we’ll take a look at the fund’s 10 largest holdings.
|VanEck Vietnam ETF (VNM) Top 10 Holdings|
|Company Name (Ticker)||Percent of VNM Assets||Description of Company|
|Vinhomes JSC (VHM:STC)||7.5%||Real estate developer|
|Vingroup Joint Stock Co. (VIC:STC)||6.8%||Conglomerate with a focus on real estate development|
|Hoa Phat Group JSC (HPG:STC)||6.7%||Steel products manufacturer|
|Masan Group Corp. (MSN:STC)||6.5%||Food and beverage processor|
|No Va Land Investment Group Corp. (NVL:STC)||6.2%||Real estate investment firm|
|Vietnam Dairy Products Corp. (VNM:STC)||5.2%||Dairy product manufacturer and distributor|
|Saigon Thuong Tin Commercial Joint Stock Bank (STB:STC)||4.2%||Individual and corporate commercial bank|
|Eclat Textile Co. Ltd. (1476:TAI)||3.9%||Fabric and garment production|
|Feng Tay Enterprise Co. Ltd. (9910:TAI)||3.9%||Manufacturer of athletic footwear|
|Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB:STC)||3.6%||Commercial bank|
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