Fund managers score - and don’t

By the end of April 2013, 42 out of 47 fund management companies had released their audited financial statements in 2012. Accordingly, these 42 companies reported more than VND770 billion ($37 million) in total revenue, operating costs of approximately VND670 billion ($32 million) and after-tax profits of nearly VND100 billion ($4.8 million).

Of profit-making units, VietinBank Fund Management was the top performer reaping VND47.2 billion ($2.2 million), then the MB Fund Management with VND20.5 billion ($985,000) and Bao Viet Fund Management VND14.6 billion ($702,000).

Notably, 25 companies reported positive return on asset (ROA) and return on equity (ROE) rates. The rates of some among them even surpassed 20 per cent while 17 companies counted losses with negative ROA and ROE rates.

On average, the ROA of fund management companies stood at 1.4 per cent and ROE at 1.6 per cent last year.

By the end of 2012, management fund companies’ total equity came to around VND3 trillion ($144 million), up VND462 billion ($22.2 million) on-year. Last year, five companies hiked chartered capital by an additional VND500 billion ($24 million), bringing fund management companies’ total chartered capital to VND3.125 trillion ($150 million).

Based on their current performance, fund management companies are divided into two groups.

The strong group consists of 28 companies which manages up to 87 per cent of entire sector’s total asset value and often retain healthy financial safety ratio of over 180 per cent.

Under Ministry of Finance current regulations, fund management companies must maintain a ratio of total usable capital over total liabilities of 180 per cent or more. If the rate fails below 120 per cent, the company will be placed under special control.

By the end of 2012, authorised investment capital value of 10 best-performing companies approximated VND100 trillion ($4.8 billion), grabbing over 90 per cent of the market share.

These firms operate mostly under insurance companies and commercial banks.

The weak group consists of 19 underperforming companies. Despite incurring losses, six companies still satisfy financial safety criteria. Two others are put into special control group— Huu Nghi Fund Management and Thanh Viet Fund Management.

Statistics also reflect by the end of 2012, 44 out of 47 [fund management] companies met available capital requirements albeit scores of companies posted accumulated losses last year. However, many of these loss-making units had claimed they still retained a healthy finance.

For instance, as of December 31, 2012 the Vietnam Alliance Fund Management JSC reported financial safety rate reaching 637 per cent whereas it lost VND2.78 billion ($133,600) in 2011 and VND2.6 billion ($125,000) in 2012.

In respect to net asset value (NAV), in 2012 listed funds’ NAV grew an average 15 per cent, higher than that of other member funds.

Notably, MAFPF1 booked 25 per cent hike in the NAV, in the second place was VF4 up 20 per cent.

Besides, the NAV of 17 operating securities investment funds surpassed VND7.2 trillion ($346 million) in 2012, up 11 per cent against the end of 2011