Vietnam’s first open-ended fund is rolled out

“Our timing to launch an open-ended fixed income fund is very favourable,” VinaWealth CEO Sebastian Subba said. “In addition to local demand, we’re very excited with early overseas institutional interest for this inaugural fund launch which will provide investors with portfolio diversification, professional investment management, hassle free investment, a degree of investor protection and a stable income higher than bank deposits.”

The State Securities Commission approved the fund (VFF) in December 2012. VinaWealth is an affiliate of VinaCapital, one of the largest investment managers in the country with $1.5 billion in assets under management until the end of 2012. VinaCapital has a 49 per cent stake in the firm.

VFF had a target net asset allocation of at least 80 per cent in bonds, said Dang Vi Thanh, director, head of retail sales at VinaWealth. The types of fixed income assets would include government guaranteed bonds, treasury bills, corporate bonds, money market investments and other instruments.  

Thanh said holdings in an open-ended fund must last at least one year to create profit, because when investors make regular and short-term transactions, fees to pay the fund manager are high compared with profit. Therefore, surfing investments are not suitable. He added the documents sent to the road show participants listed risks and disadvantages of an open-ended fund in detail.  

VinaWealth’s fixed income investments products, Thanh said, were intended to secure investors’ portfolios, taking advantage of Vietnam’s sovereign bond yields, which were higher than other nations at a similar risk rating. “Through our expertise and research, VinaWealth will utilise the appropriate amount of fixed income investments to help our investors meet their financial goals.”  
HSBC has been appointed as the supervisory bank, transfer agent and fund administrator for VFF.

Saigon Securities Inc. (SSI), one of the top brokering houses in Vietnam, will distribute the fund units.
The Ministry of Finance is set to issue a circular on the establishment and management of open-ended funds in Vietnam soon.