Dynam Capital, the investment manager of Vietnam Holding (VNH) said in its latest investor report that the fund outperformed the Vietnam All Shares (VNAS) index in May 2022.
Although global equities worldwide saw another bumpy month - namely due to the growing concerns regarding the war in Ukraine and intensifying disruptions which in turn, affected global equities - VNH outperformed the VNAS index, falling by 6.3% compared to the VNAS decline of 7.5%.
In the year-to-date, the fund has outperformed the index by 6.7% due mainly to overweight positions in ports & logistics, retail and telecoms (FPT) with a diverse performance, it said.
Addressing shareholders today, Dynam Capital acknowledged how Vietnam is “fast becoming one of the main beneficiaries of shifting supply chains” and that, in recent months, the market has increasingly shown how the government's 'open for business' policies are paying off.
“As the government continues to build on its economic story post-pandemic, by also focusing on improving regulatory and legal frameworks, we see how the 'Made in Vietnam' theme is making its mark on the global stage more than ever before,” said the fund's manager Craig Martin.
This has been triggered by some milestone events including Vietnam’s Prime Minister Pham Minh Chinh ringing the closing bell of the New York Stock Exchange (NYSE) and Apple announcing that it would be moving some iPad production out of China and into Vietnam. Apple follows the likes of Samsung and Intel into the country, cementing its position as one of the world's top exporters of electronics. Mr Martin said manufacturers from all over the world are now looking at Vietnam as part of their relocation strategy to effectively diversify and reduce supply chain risks.
Mr Martin also noted that, unlike China, Vietnam has largely overcome the pandemic, having successfully rolled out a vaccination programme. In addition, Vietnam has also not been as badly hit by higher fuel costs and increased fertiliser prices as others “because as a food producer it can feed itself and export anything from fruit and vegetables to coffee.”
The Asian Development Bank has confirmed its growth forecasts for Vietnam's economy: 6.5% in 2022 and 6.7% in 2023. Despite the nuances and difficult global risk environment of 2022, Dynam said the fund has demonstrated its outperformance over 1, 3, and 10 years.
Mr Martin added: “Our size means we are nimble and able to take advantage of opportunities across small, medium and large companies as industry shifts and cultural transformations unfold. Valuations also have become more compelling following the correction in April when domestic retail investors faced margin calls, and the fund has cash to take advantage of this.
Looking ahead into the second half of the year, we expect foreign direct investment to rise as well, particularly as travel resumes and demand for infrastructure development grows.”
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In March 2021, Vietnam Holdings recorded a “strong” six month period to 31 December 2021 with net asset value per share rising 14.1% in US dollars and 31.7% in GBP pounds, respectively.
Vietnam's open economy approach has seen its trade reaching more than $668 bn in 2021, representing more than 200% of GDP, levels seen by only a few countries globally.
Overall, Vietnam’s stock market was one of the best performing in the world in 2021, with domestic indices hitting record levels. As a result, the fund was up over 63.9% for calendar 2021, and 14.1% for the period under review outperforming the VNAS (+10.6%) and peers.
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