The Vietnam Holding Investment Trust has achieved something no other London-listed Vietnam-focussed Investment Trust has been able to do for over 15 years – expand the size of its fund by issuing shares to investors.
Vietnam Holding’s strong performance has captured the attention of investors to the extent it has completely erased its share price discount to net asset value (NAV), enabling managers Dynam Capital to issue new shares to investors.
Investment Trusts can only issue new shares to investors when the share price trades at a premium to NAV to avoid diluting existing shareholders.
Vietnam Holding’s ability to do this is remarkable not only because no other Vietnamese Investment Trust has issued shares in over a decade but also because very few Investment Trusts of any asset class or size have delivered a premium to investors and issued shares in recent years.
Vietnam’s growth story has been a core driving force in VNH’s success. However, Dynam Capital’s high-conviction approach to fast-growing Vietnamese equities has set it apart from its peers.
To add context to VNH’s achievement, its peers are still trading at well over 20% discounts to NAV despite having access to the same universe of Vietnamese equities.
While some investors may see value in the wide discounts when considering Investment Trusts, it should be noted that Vietnam Holding has produced the best NAV returns of the single country emerging market Investment Trust space in recent years and has been rewarded with a CityWire AAA Rating for doing so.
Vietnam Holding takes a high-conviction approach to Vietnamese stocks and has built a concentrated portfolio of stocks that play into key themes of digitalisation, industrialisation, and urbanisation.
Their strategy has been amplified by an innovative share redemption scheme that allows investors to realise their shares in VNH at fair market value annually.