Vietnam has undergone dramatic shifts in recent decades as the country evolves from a command economy to a market economy. Many investors have looked at emerging markets such as Vietnam as an area of potential investment. Vietnam's government said in December that it expects the economy to expand by 6.5% in 2021 after the COVID-19 pandemic and other forces led to the slowest growth in decades in 2020. 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 outperformed the broader market over the past year.
- The best (and only) Vietnam ETF is VNM.
- Its top three holdings are Vinhomes JSC, Vingroup Joint Stock Company, and No Va Land Investment Group Corp.
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 outperformed the broader market with a total return of 34.0% over the past 12 months compared to the S&P 500's total return of 29.4%, as of March 3, 2021. 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 from ETFdb.com as of March 5, 2021, except where specifically cited.
- 1-Year Trailing Total Returns: 24.7%
- Expense Ratio: 0.66%
- Annual Dividend Yield: 0.39%
- 3-Month Average Daily Volume: 364,130
- Assets Under Management: $478.6 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, which reflects the performance of the largest and most liquid companies that operate 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 two thirds of the fund's holdings are of companies domiciled in Vietnam with another 20% domiciled in South Korea. Real estate has the largest sector weighting in the fund, at nearly 28% 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 March 5, 2021.
|VanEck Vectors Vietnam ETF (VNM) Top 10 Holdings|
|Company Name (Ticker)||Percent of VNM Assets||Description of Company|
|Vinhomes JSC ( VHM:STC)||7.7%||Real estate developer|
|Vingroup JSC ( VIC:STC)||7.4%||Conglomerate with a focus on real estate development|
|No Va Land Investment Group Corp. (NVL:STC)||7.2%||Real estate investment firm|
|Vietnam Dairy Products Corp. (VNM:STC)||7.0%||Dairy product manufacturer and distributor|
|Joint Stock Commercial Bank for Foreign Trade of Viet Nam ( VCB:STC)||6.1%||Commercial bank|
|Hoa Phat Group JSC (HPG:STC)||6.1%||Steel products manufacturer|
|Vincom Retail JSC ( VRE)||5.2%||Commercial retail-focused real estate investment and operations|
|MCNEX Co. Ltd. ( 097520:KRX)||5.0%||Manufacturer of camera modules|
|Masan Group Corp. (MSN:STC)||4.9%||Food and beverage processor|
|Eclat Textile Co. Ltd. ( 1476:TAI)||4.5%||Textile and clothing manufacturer|
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
Reuters. "Vietnam PM eyes raising of 2021 GDP growth target to 6.5%." Accessed Mar. 8, 2021.
YCharts. "Financial Data." Accessed Mar. 5, 2021.
ETFdb.com. "ETF Screener." Accessed Mar. 5, 2021.
MVIS Investable Indices. "MVIS Vietnam Index." Accessed Mar. 5, 2021.
VanEck. "VNM - VanEck Vectors Vietnam ETF." Accessed Mar. 5, 2021.
ETFdb.com. "VanEck Vectors Vietnam ETF." Accessed Mar. 5, 2021.