WHAT IS THE BEST VIETNAM ETF ON THE STOCK MARKET?

Typically I would think most retail foreign investors in the Vietnam stock market look to ETFs to provide their exposure. Before you rush into the first ETF you see that can offer exposure to Vietnam stocks, it is important to be aware of the basic structures and relative difference of the various choices.

For example, some might be surprised to learn that one of the most popular Vietnam ETFs has about a third of its portfolio in stocks listed on exchanges outside of Vietnam. I am not necessarily saying that is a bad thing, it just illustrates the point that what you are buying can throw up plenty of difference depending on your choice of Vietnam ETF. Read on to discover a little more about three prominent Vietnam ETFs on the stock market.

Investing in Vietnam exchange traded funds (ETFs)

Vietnam Stock Index ETFs

In my last blog post I briefly mentioned a few ETFs one could look at to get exposure to the Vietnam stock market. If you want to learn more about whether to choose an ETF vs CEF or open ended fund, don’t forget to checkout that blog post here first, HOW TO INVEST IN THE VIETNAM STOCK MARKET. ETF, CEF, FUND? – VIETNAM STOCK MARKET (vietnamesestockmarket.com). Here are the list of ETFs again below:

List of Vietnam ETFs

  • VanEck Vectors Vietnam ETF (VNM US)
  • Xtrackers FTSE Vietnam Swap UCITS ETF (XFVT LN)
  • Premia MSCI Vietnam ETF (2804 HK)

I will not take a bit of a closer look at these options.

VanEck Vectors Vietnam ETF (VNM US) Review / Brief Summary

VNM ETF Objective – VanEck Vectors Vietnam ETF (VNM ) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Vietnam Index (MVVNMTR ), which includes securities of publicly traded companies that are incorporated in Vietnam or that are incorporated outside of Vietnam but have at least 50% of their revenues/related assets in Vietnam.

VNM ETF Size – $US 569 million

Exchange – US

VNM ETF Fees – 61 bps

VNM ETF Top holdings

VNM ETF Performance since inception

Source: VanEck Fact Sheet May 2021

Xtrackers FTSE Vietnam Swap UCITS ETF (XFVT LN) Review / Brief Summary

XFVT ETF Objective – The FTSE Vietnam Index which is designed to reflect the performance of the shares of those companies in Vietnam which have sufficient shares available for foreign ownership listed on the Ho Chi Minh City Stock Exchange. As well as the foreign ownership requirement, the companies are selected on the basis that they have the largest combined value of shares as compared to other companies on the stock exchange. The Index is calculated on a total return net basis which means that all dividends and distributions by the companies are reinvested in the shares after tax. The composition of the Index is reviewed at least every month. At review the index constituents are capped if their weight within the Index is greater than 15%.

XFVT ETF Size – $US 463 million

Exchange – London

XFVT ETF Fees – 85bps

XFVT ETF Top holdings

XFVT ETF Performance since inception

Product launched in January 2008

Source: DWS Xtrackers Factsheet May 2021

Premia MSCI Vietnam ETF (2804 HK) Review / Brief Summary

Premia MSCI Vietnam ETF Objective – The ETF tracks the investment results, before fees and expenses, of the MSCI Vietnam Index (NTR).

Premia MSCI Vietnam ETF Size – $US 30 million

Exchange – HK

Premia MSCI Vietnam ETF Fees – 75 bps

Premia MSCI Vietnam ETF Top holdings

Premia MSCI Vietnam ETF Performance since inception

Note listed only in July 2019

Source: Premia Partners June 2021

SHOULD I INVEST IN VIETNAM AND HOW BEST TO INVEST IN THEIR STOCK MARKET?

Overall from these ETFs I have a personal preference for VanEck Vectors Vietnam ETF (VNM US). Fees appear cheaper but that is not the main driver for my preference. I prefer the more diversified portfolio versus some of the more concentrated holdings I see in the other 2 ETFs. I also don’t mind the fact VNM:US has plenty of exposure to companies on other stock exchanges for example (stocks with significant operations still in Vietnam). I also think this ETF has established itself as quite popular amongst investors, so am comfortable it will be around for a very long time.

Vietnam ETF in Singapore, Canada, Australia etc. VNM ETF?

These Vietnam ETFs above I have covered have their main listings on stock exchanges in the US, London and Hong Kong respectively. These days it is pretty common for investors from developed economies such as Singapore, Canada, Australia etc. to have brokerage accounts with simple access to such stock exchanges. If the specific Vietnam ETF is therefore not directly accessed on your home country’s exchange it still might be easily accessible if you have overseas markets trading with your stockbroker.

Is Vietnam a good investment?

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