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Vietnam Holding: ‘exposure to a high-growth frontier market with conviction stock ideas’

Vietnam Holding

Vietnam Holding (LON:VNH) is a closed-ended fund that invests in high-growth companies in Vietnam, focusing on domestic consumption, industrialisation and urbanisation.

The London-listed investment trust, launched in 2006, offers nimble stock selection with integrated ESG. It has also been signed up to the United Nations Principles for Responsible Investment (PRI) for over ten years.

“We have a team of 12 people on the ground in Vietnam actively managing the fairly concentrated portfolio”, said Craig Martin, chairman of Dynam Capital, the manager of Vietnam Holding.

In June, Edison Group, the investment research and advisory company, released a research note on the fund, making the case that it offers investors exposure to a high-growth frontier market.

Edison Analyst View

Edison is of the view that Vietnam Holding gives investors exposure to a high-growth frontier market with “conviction stock ideas across the market cap spectrum”.

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Vietnam’s transformation began some 30 years ago and the analyst now feels that the country is booming. 60% of the fund is geared towards consumption, industrialisation and urbanisation, and Edison feels that it is well placed to offer exposure to these mega trends.

“VNH’s performance relative to the index can be volatile”, said Edison’s research note. This is because it is a very concentrated fund. “Over the past month (to end-May), the top four holdings (39% of NAV) drove strong outperformance vs the index (19% NAV TR vs 8% for the index), resulting in the fund’s NAV outperforming over one and three months,” the note added.

Performance

Vietnam Holding does not have a benchmark, however, Edison used two Vietnamese equity indices to measure the fund’s performance.

The London-based fund has outperformed the VN Index (385 members, the broader market index of the two) and VN All-Share Index (259 members) over the past six months and one year period by 9.2% and 6.3%, and 12.1% and 9.2% respectively. This is on a net asset value (NAV) total return basis.

The portfolio is set to perform well in 2021, according to Edison. That is because of its allocation to economically sensitive industries including banks and retail, providing the economy continues to perform well supported by the “global cyclical recovery and ongoing domestic growth”.

UK Investor Magazine Conference

Vietnam Holding (LON:VNH) presented at the UK Investor Magazine Virtual Conference in March.

Craig Martin, Chairman of Dynam Capital, the manager of Vietnam Holding, presents the case of investing in Vietnam and provides detailed insight into the Southeast Asian economy.

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