How to Invest in Vietnam’s Hot Stock Markets

Investors large and small, and foreign as well as domestic, can buy and sell stock in hundreds of Vietnamese companies that are listed in two separate exchanges, one in Hanoi and one in Saigon.  To trade individual stocks, foreign investors need to go to Vietnam, obtain an investment license, and establish a relationship with a brokerage and a bank to handle transactions.

However, there are too easy ways for foreigners to invest in Vietnam’s public equity markets without leaving their desktops or smartphones or traveling outside the office or home.  Both involve purchase of funds traded on international markets, which can be accomplished in minutes online.

The funds are:

  1. VNM  — Market Vectors Vietnam is an exchange traded fund incorporated in the US.  The fund is designed  to replicate the performance of Vietnam’s overall market, but at times has been overweighted with financial companies.  It invests 80% of  assets in securities that comprise its benchmark index.
  2. VCVOF — Vietnam Opportunity Fund is a thinly traded  $672 million investment company incorporated in the Cayman Islands and actively managed by VinaCapital’s team of investment professionals based in Vietnam. The fund aims for capital appreciation and income by investing in listed and unlisted companies in Vietnam and, in some cases, elsewhere in Southeast Asia.

Like Vietnam itself, both funds had weak performance over the past three years, but both have been on a tear since late fall.  VNM increased 36% over the past year and 42% in the past three months.  VCVOF is up 39% over the past year and 25% since December 1.

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