Open-end funds operating in Viet Nam have recorded a positive 2016 with rate of returns of some funds outperforming the growth of the benchmark VN-Index on the HCM Stock Exchange.
|Rate of returns of many open-end funds in Vietnam outperformed the VN-Index in 2016.-Photo money.usnews.com|
The VN-Index closed last year up 14.8 per cent over December 31, 2015. This is the general profitability of the market but actual earnings depended on the portfolios of investors.
Open-end funds were among few traders who beat the growth of the Index in 2016.
SSI Sustainable Competitive Advantage Fund (SSI-SCA) reported the highest growth rate in net asset value (NAV) of 24.3 per cent as of January 5, 2017, its best result since it began operating in 2014.
The fund, managed by SSI Asset Management Co Ltd, focusses on investments in companies with sustainable competitive advantages and fixed income assets.
According to the fund’s November report, four top holdings of the funds accounted for 33.2 per cent of its total portfolio, including steelmaker Hoa Phat Group (HPG), 13.7 per cent; Dabaco Group (DBC), 8.7 per cent; dairy firm Vinamilk (VNM), 5.9 per cent; and Coteccons Construction JSC (CTD), 4.9 per cent.
Except Vinamilk which declined 2 per cent, the other three stocks posted big gains last year with price rises of between 19 per cent and 50 per cent, of which HPG and DBC increased 50 per cent and 41 per cent, respectively by the end of December.
The second most profitable fund in 2016 was a fund managed by VietFund, Vietnam Securities Investment Fund (VFMVF1), with NAV growth of around 23 per cent last year, as quoted by Bloomberg.
Its top holdings also included large-cap stocks like Vinamilk, software producer FPT Corp (FPT), PetroVietnam Nhon Trach 2 Power JSC (NT2), Dabaco Group and Hoa Phat Group (HPG).
The other two funds which outperformed the VN-Index were Vietnam Blue Chips Fund (VFMVF4) a 20 per cent, and VCBF Blue Chip Fund (VCBF) at 19.5 per cent.
Six of the 10 Viet Nam-based open-end funds also performed well last year, though their growth was below the VN-Index expansion, with NAV increases of between 10 per cent and 17 per cent.
The average NAV growth of these 10 funds reached 17.5 per cent in 2016.
These figures have shown that investing in open-end funds brought higher returns compared to depositing in banks or self-investments. In fact, not many individual investors can outperform the market indices as the factors such as allocation of shares, holding period or time of purchase/sale decide profit margins of investors.