Vietnam has undergone dramatic shifts in recent decades as the country evolves from a command economy to a market economy. Today, many investors are looking at emerging markets such as Vietnam as an area of potential investment. One way investors can gain exposure to the Vietnamese economy is by investing in a Vietnam-focused exchange-traded fund (ETF), which can offer increased diversification, helping to protect against 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 market over the past year.
- The best (and only) Vietnam ETF is the VNM.
- Its top three holdings are Vietnam Diary Products JSC, Vingroup JSC, and Vinhomes 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 -6.1% over the past 12 months compared to the S&P 500's total return of 12.0%, as of November 3, 2020. The best-performing (and only) Vietnam ETF is the VanEck Vectors Vietnam ETF (VNM). We take a closer look at this fund below. All numbers below are as of November 4, 2020.
- Performance over 1-Year: -9.0%
- Expense Ratio: 0.68%
- Annual Dividend Yield: 0.81%
- 3-Month Average Daily Volume: 192,658
- Assets Under Management: $385.5 million
- Inception Date: August 11, 2009
- Issuer: VanEck
While there are other emerging market ETFs that include small holdings of Vietnamese equities, VNM is the closest thing to a pure play Vietnam ETF that U.S. investors are likely to find. The fund tracks the MVIS Vietnam Index (MVVNM), which reflects the performance of the largest and most liquid companies in Vietnam. The index also includes non-Vietnamese companies that generate at least half of their revenues 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 which generate at least 50% of their revenue from Vietnam. Over 65% of the fund's holdings are of companies domiciled in Vietnam with another 25% domiciled in South Korea, and real estate receives the largest weighting in the fund, at 27% of net assets. The fund follows a blended strategy, investing in both growth and value stocks. Below, we'll take a look at the fund’s 10 largest holdings as of November 4, 2020.
|VanEck Vectors Vietnam ETC (VNM) Top 10 Holdings|
|Company Name (Ticker)||Percent of VNM Assets||Description of Company|
|Vietnam Dairy Products JSC (VNM:HSX)||8.5%||Dairy product manufacturer and distributor|
|Vingroup JSC (VIC:HSX)||8.1%||Conglomerate with a focus on real estate development|
|Vinhomes JSC (VHM:HSX)||6.7%||Real estate developer|
|No Va Land Investment Group Corp. (NVL:HSX)||6.6%||Real estate investment firm|
|Joint Stock Commercial Bank for Foreign Trade of Viet Nam (VCB:HSX)||6.2%||Commercial bank|
|Hoa Phat Group JSC (HPG:HSX)||5.4%||Steel products manufacturer|
|Vincom Retail JSC (VRE:HSX)||5.3%||Commercial retail-focused real estate investment and operations|
|Eclat Textile Co. Ltd. (1476:TAI)||5.0%||Textile and clothing manufacturer|
|Mani Inc. (7730:TYO)||4.8%||Manufacturer of medical instruments|
|MCNEX Co. Ltd. (097520:KOE)||4.3%||Manufacturer of camera modules|
YCharts. "Financial Data." Accessed Nov. 4, 2020.
ETFdb.com. "ETF Screener." Accessed Nov. 4, 2020.
MVIS Investable Indices. "MVIS Vietnam Index." Accessed Nov. 4, 2020.
VanEck. "VNM - VanEck Vectors Vietnam ETF." Accessed Nov. 4, 2020.
ETFdb.com. "VanEck Vectors Vietnam ETF." Accessed Nov. 4, 2020.