An investor watches stock indices on his laptop. The appearance of new ETFs promises to bring more choices to investors and at the same time attract capital flows into the market in the future. — Photo courtesy of VNDirect Securities Co
The capital inflow into exchange-traded funds (ETFs) is returning to the market after a long period of stagnation, and even net withdrawals over the past three months.
Since the beginning of October, ETFs have net withdrawn about VND1.8 trillion (US$75.4 million), of which Fubon FTSE Vietnam ETF alone attracted more than VND900 billion. So far the fund has drawn a cash flow value of up to VND7.2 trillion.
DCVFM VNDiamond ETF also made an impressive comeback after three consecutive months of being net sold, with a value of more than VND1.8 trillion in the third quarter. Since the beginning of October, this ETF has net withdrawn about VND335 billion, thereby raising the value of cash inflow from the beginning of this year to VND4.1 trillion.
DCVFM VN30 ETF saw a net withdrawal of more than VND400 billion since the beginning of October, the largest amount since the beginning of this year. Previously, in the first seven months, this ETF was being net sold strongly. Since the beginning of this year, the cash flow into VN30 ETF has remained negative by nearly VND1.5 trillion.
V.N.M ETF has attracted VND247 billion since the beginning of October. Previously, this ETF continuously net sold nearly VND1.2 trillion after 9 months.
On the other hand, the capital inflow into SSIAM VNFinLead ETF is showing signs of reversing as it was net sold VND52 billion since the beginning of October after drawing money inflow for six consecutive months. The FTSE Vietnam ETF is also slowing down after three successful months of withdrawals. However, since the beginning of this year, both FinLead ETF and FTSE ETF have been attracting money with a value of more than VND450 billion and nearly VND200 billion, respectively.
Capital inflows are showing signs of returning to the Vietnamese market through ETFs despite the global withdrawal trend due to the US Fed's rate hikes to attract money. The prospect of Vietnamese securities is still considered attractive, especially in the eyes of foreign investors. The recent investment from Hong Kong CSOP FTSE Vietnam 30 ETF pouring capital into the Vietnamese stock market is a clear example. This ETF is expected to invest 100 per cent of its assets in Vietnamese stocks.
CSOP is an investment-focused asset management company in the Chinese market. CSOP currently manages public and private equity funds, as well as provides investment advisory services to Asian and global investors. As of August 31, 2022, CSOP is managing more than US$12 billion.
According to the CSOP assessment, Viet Nam is one of the fastest-growing economies in the world. Thanks to a favourable domestic and global environment, Viet Nam's GDP has grown 15 times over the past 25 years. Viet Nam is also the only Southeast Asian country to maintain positive economic growth in the last two years despite the COVID-19 pandemic. The International Monetary Fund (IMF) forecasts that Viet Nam will be one of the fastest-growing economies in Southeast Asia.
Previously, the third ETF under Dragon Capital, DCVFM VNMidcap ETF, was also officially listed on September 29. This ETF is the first fund to refer to the VNMidcap, a market-capitalisation-weighted index which measures the performance of 70 medium market-capitalisation companies on the HoSE. This is a popular group among many individual investors, especially in the last 2 years thanks to its good liquidity and high price volatility.
The KIM Growth VNFinselect ET will also be launched soon. This ETF's portfolio includes leading bank and securities company stocks in terms of liquidity and capitalisation.
The appearance of new ETFs promises to bring more choices to investors and at the same time attract capital flows into the market in the future. — VNS