VFMVN Diamond ETF most attractive to foreign investors

A total of VND1.5 trillion (US$64.4 million) worth of capital has been poured into the local exchange-traded fund VFMVN Diamond ETF in December, largely from top investment funds such as Dragon Capital and Pyn Elite Fund.— Photo tinnhanhchungkhoan.vn

VFMVN Diamond ETF is one of the biggest investees at Pyn Elite Fund, which has drawn a total of VND820 billion ($35 million) from the fund.

The Taiwan-based investment fund CTBC Vietnam Equity Fund has bought 16 million certificates of VFMVN Diamond ETF, worth VND262 billion.

Foreign investors have net-sold a huge amount of Vietnamese assets since the beginning of the year.

As of last week, they had sold a net value of total VND15 trillion on the Ho Chi Minh Stock Exchange alone – a record high.

But the trend has somehow reversed in December as foreign investors turn to net-buying assets through order-matching transactions.

Beside VFMVN Diamond ETF, foreign investment funds have also been interested in buying the certificates of FTSE Vietnam ETF.

The return of foreign capital has helped boost the Vietnamese market in recent weeks.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange has climbed a total of 7 per cent in December to more than 1,080 points.

According to Pyn Elite Fund, the VN-Index could reach 1,800 points at the end of the year.

The local market has benefited from the recovery of the economy, aided by the Government’s efforts to successfully control the coronavirus spread.

In addition, low bank saving rates and low government bond yield rates have encouraged individual investors to look for other investment options and poured a huge amount of cash into the stock market.

According to Andy Ho, CEO and investment chief at VinaCapital, Viet Nam’s macroeconomic conditions will soon stabilise and the investment environment will be key to the growth of the securities market.

In addition, the expectation of being re-classified by Morgan Stanley Capital International (MSCI) will also help Vietnamese assets lure attention from foreign investors.

But the return of foreign investors into Viet Nam can only be determined after the official US presidential election result is announced, deputy director of the fund management firm VMF, said.

Until then, there will still some ups and downs with foreign capital, he said. — VNS