Vietnam equity ETFs surge

Nov 30th, 2017 | By | Category: Equities

ETFs that provide exposure to Vietnam-listed equities, such as the db x-trackers FTSE Vietnam UCITS ETF (XFVT GR), have displayed remarkable performance recently, rising nearly 30% between the start of August and 28 November.

Vietnam equity ETFs surge

GDP growth in Vietnam is 6.4% with economic prospects looking strong.

The jump in the Vietnamese equity market comes on the back of a strong economy boosted by rising foreign investment and increasing desire for privatisation by the ruling communist government. Year-on-year GDP growth is currently around 6.4%, and the emerging market country looks set to capitalise further from a growing manufacturing sector that is being helped by wage rises in neighbouring China.

XFVT, from issuer Deutsche Asset Management, is the only European-listed ETF to provide access to Vietnamese equities. The fund tracks the FTSE Vietnam Index, which offers exposure to companies listed on the Ho Chi Minh Stock Exchange that have sufficient foreign ownership availability.

The index is relatively concentrated, being comprised of just 22 companies. The largest is Vingroup (14.7%), followed by Vietnam Dairy Products (14.0%), Masan Group (13.2%), and Hoa Phat (11.9%). The largest sectors represented in the index are real estate (23.5%), financial services (17.8%), food and beverage (16.3%), and construction and materials (14.0%).

XFVT was launched in January 2008 and has assets under management of $284 million with a total expense ratio of 0.85%.

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