Vietnam has undergone dramatic changes in recent decades as the country has developed beyond command economy to a market economy. Many investors have looked at it emerging markets such as Vietnam as an area of potential investment.
Vietnam’s economic growth slowed to around 2.6% in 2021 after growing more than 2.9% in 2020, according to the country’s General Statistics Office (GSO). In 2022, the country has rebounded significantly from the COVID-19 pandemic. The World Bank predicts growth of 7.5% for the entire year 2022.
One way investors can gain exposure to Vietnam’s economy is by investing in Vietnam-focused stocks exchange traded fund (ETF). If you do, you can offer more diversificationhelps 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 stocks have underperformed the broader US market over the past year.
- The best (and only) Vietnamese 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 US that is dedicated to the Vietnamese stock market. Vietnamese stocks as measured by MSCI Vietnam have underperformed the broader market over the past 12 months, with a total return of -20.3%, compared to the S&P 500’s total return of -11.0% as of September 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 September 2, 2022. To focus on the fund’s investment strategy, the best holdings listed for ETFs in our listings do not include cash holdings and holdings purchased with securities lending proceeds except in unusual cases, such as an exceptionally large portion of cash.
VanEck Vietnam ETF (VNM)
- Performance in 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
- Start date: August 11, 2009
- Issuer: VanEck
While some emerging market ETFs hold Vietnamese stocks, VNM is the closest to a pure game. The fund tracks the MVIS Vietnam Index, which reflects the performance of the largest and most liquid companies operating in Vietnam. VNM is a multi-cap ETF that invests in a variety of stocks market capitalization. Like its index, it includes companies that are based in Vietnam and elsewhere, but that generate at least 50% of their revenue from Vietnam. More than 82% of the fund’s shares are companies based in Vietnam. Companies based in Taiwan, South Korea, Japan and Malaysia are also represented. Real estate has the largest sector weight in the fund, followed by consumer goods and financials. VNM follows a mixed strategy and invests in both grow and value supplies. Below we look at the fund’s 10 largest holdings.
|VanEck Vietnam ETF (VNM) Top 10 holdings|
|Company name (ticker)||Percentage of VNM assets||Company description|
|Vinhomes JSC (VHM: STC)||7.5%||Real estate developer|
|Vingroup Joint Stock Co. (VIC: STC)||6.8%||A conglomerate with a focus on real estate development|
|Hoa Phat Group JSC (HPG: STC)||6.7%||Manufacturer of steel products|
|Masan Group Corp. (MSN: STC)||6.5%||Food and beverage processor|
|No Va Land Investment Group Corp. (NVL: STC)||6.2%||Real estate investment company|
|Vietnam Dairy Products Corp. (VNM: STC)||5.2%||Manufacturer and distributor of dairy products|
|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 clothing production|
|Feng Tay Enterprise Co. Ltd. (9910:TAI)||3.9%||Manufacturer of sports shoes|
|Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB: STC)||3.6%||Commercial Bank|
The comments, opinions and analysis expressed herein are for informational purposes only and should not be construed as individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information contained herein to be reliable, we do not guarantee its accuracy or completeness. The opinions and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analysis contained in our content are provided as of the date of publication and are subject to change without notice. The material is not intended to be a complete analysis of all material facts relating to any country, region, market, industry, investment or strategy.