Best (and only) Vietnam ETF in the first quarter of 2022

In recent decades, as Vietnam has developed from a command economy to a market economy, Vietnam has undergone a huge transformation. Many investors see emerging markets such as Vietnam as potential investment areas. Vietnam’s economy has grown by 2.9% in 2020 and is one of the few economies that expanded during the COVID-19 pandemic. Due to the continuing negative impact of the COVID-19 pandemic, Vietnam’s GDP fell by 6.2% in the third quarter of 2021. The government’s goal is to grow by 6.5% for the full year of 2021, but a minister said in September that GDP growth may be closer to 3.5% to 4%. One way for investors to gain exposure to the Vietnamese economy is to invest in Vietnam-focused exchange-traded funds (ETFs) that can provide more diversification and help withstand risks. Some of the largest companies in Vietnam include Hoa Phat Group JSC (HPG) and No Va Land Investment Group Corp. (NVL).

Key points

  • In the past year, the Vietnamese stock market outperformed the market.
  • The best (and only) Vietnam ETF is VNM.
  • Its top three holdings are Vingroup Joint Stock Co., Vinhomes JSC and Masan Group Corp.

In the United States, there is only one different ETF transaction that specifically targets the Vietnamese stock market. Measured by the MSCI Vietnam Index, the Vietnamese stock market has outperformed the broader market, with a total return of 28.8% in the past 12 months, while the S&P 500 index has a total return of 25.6% as of December 3, 2021. The best performing (and only) Vietnam ETF is VanEck Vectors Vietnam ETF (VNM). Let’s take a closer look at this fund below. All figures below are from ETFdb.com, as of December 2, 2021.

  • Performance over one year: 27.3%
  • Expense rate: 0.61%
  • Annual dividend yield: 0.34%
  • 3-month average daily volume: 205,495
  • Assets under management: $584.6 million
  • Date of establishment: August 14, 2009
  • Publisher: VanEck

Although some emerging market ETFs own Vietnamese stocks, VNM is the closest thing to pure trading. 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-share ETF that invests in stocks of various market capitalizations. Like its index, it includes companies registered in Vietnam and elsewhere but at least 50% of their revenue comes from Vietnam. More than three-quarters of the fund’s shares are companies registered in Vietnam. Companies in Taiwan, South Korea, Japan and China are also represented. Real estate has the largest weight in the fund, followed by consumer staples, finance, consumer discretionary goods, and industry. VNM follows a mixed strategy while investing in growth and value stocks at the same time. Below, we will look at the top 10 holdings of the fund.

VanEck Vectors Vietnam ETF (VNM) top 10 holdings
Company name (code) Percentage of VNM assets company description
Vingroup Joint Stock Company (VIC: STC) 8.7% A comprehensive enterprise focusing on real estate development
Vinhomes JSC (VHM:STC) 7.5% Real estate developers
Masan Group (MSN: STC) 7.2% Food and beverage processor
Vietnam Dairy Company (VNM: STC) 6.8% Dairy manufacturers and distributors
No Va Land Investment Group Corp. (NVL:STC) 5.7% Real Estate Investment Company
Hoa Phat Group JSC (HPG:STC) 5.4% Steel product manufacturer
Thaiholdings JSC (THD:HSTC) 4.9% Real estate leasing and construction companies
Eclat Textile Co. Ltd. (1476: TAI) 4.4% Fabric and garment production
Vietnam Foreign Trade Joint-stock Commercial Bank (VCB: STC) 4.4% commercial Bank
Winterthur Enterprise Co., Ltd. (9910: TAI) 4.0% Sports shoe manufacturer

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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