Investment funds change strategies

04-Feb-2020 Intellasia | Vietnamnet | 6:02 AM Print This Post

Following a volatile 2018 which witnessed the US-China trade war, the stock market in 2019 was gloomy with the VN Index hovering around 900-1,000 points.

Though the VN Index still increased by 10 percent, not many investors, including institutional ones with experience, could obtain the expected profitability.

Investors withdraw capital from domestic funds

Because of uncertainties, many investors are seeking new investment channels which promise higher yields and can bring more stable profits such as bank deposit, corporate bond and gold. As a result, equity funds saw net capital withdrawal in 2019.

As for domestic open funds, except SSI-SCA and MAFEQI which saw the net asset value increasingly slightly, other funds all witnessed a decline, though most of them gained growth in 2019.

Analysts said though the investment results in 2019 were more satisfactory than in2018, net capital withdrawal still occurred because of investors’ worry about instability, which may have a negative impact.

Foreign investment funds, however, maintained capital inflow. VanEck ETF even saw capital increasing sharply.

VanEck ETF is listed in the US and the continued capital inflow shows the expectation by investors in the US about the benefits Vietnam can obtain from the US-China trade war.

Most funds see growth rates lower than VN Index

Eight out of 10 surveyed investment funds had profitability lower than the VN Index. Only VFMVF1 and VFMVF4 had business results slightly better than the VN Index.

Since investment funds choose VN Index or VN30-Index as the indicators for reference to assess the business efficiency, their portfolios also cling to shares with high capitalisation value in the market such as VIC, VCB, VNM, MWG and HPG.

Thoi Bao Kinh Te Saigon found that the funds following the investment strategy based on individual growth drivers of stocks had better investment results in 2019. Meanwhile, funds mostly make investments based on certain business fields. That is why they have a low growth rate.

Changing portfolios

Most investment funds have a common investment strategy. The three business fields they are most interested in include finance, non-essential consumer goods and information technology. Meanwhile, most funds reduce investments in industries and materials.

Regarding bank shares, MBB was bought by nearly all funds. VCB saw a higher proportion in the portfolios of VFMVF1, VFMVF4 and VEOF, thanks to good investment results.

Meanwhile, many funds sold or reduced the amounts of TCB and ACB shares they hold (VFMVF1, VFMVF4, SSI-COAD, VCBF-BCF, VCAMBF, ENF). The two funds managed by VFM also cut the proportion of ACB in their portfolios.


Category: Stocks, Vietnam

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