The Best (And Only) Vietnam ETF for Q1 2020

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Vietnam has undergone dramatic shifts in recent decades, as the country evolves from a command economy to a market economy. Now, investors are looking toward this emerging market as an area of potential investment, particularly as Vietnamese exports begin to figure into the global economy. One way to gain access to the Vietnamese market is through an exchange-traded fund (ETF), which offers increased portfolio diversity, helping to protect investors against risk.

We alert our readers that Vietnam is very different from most of the ETF universe, where investors often can choose from among a large number of ETFs that are focused on a single sector or region. Not so with Vietnam. For the time being, the best (and only) Vietnam-focused ETF is the VanEck Vectors Vietnam ETF (VNM). So this may make a selection relatively straightforward once investors decide that Vietnamese companies in this ETF portfolio fall within their parameters. To be sure, the ETF’s negative return for the past year suggests that investors will have to be patient. All figures below are as of February 18, 2020.

  • Performance over 1 year: -6.0%
  • Expense Ratio: 0.68%
  • Annual Dividend Yield: 0.79%
  • 3-Month Average Daily Volume: 219,027
  • Assets Under Management: $425.7 million
  • Inception Date: August 11, 2009
  • Issuing Company: VanEck

While there are other emerging markets ETFs that include small holdings of Vietnamese equities, VNM is the closest thing to a pure play Vietnam ETF that U.S. investors are likely to find. This fund tracks the performance of the MVIS Vietnam Index, a modified market cap-weighted index tracking both Vietnamese companies and also non-local firms generating more than half of their revenue in Vietnam. While this means that the index, as well as VNM, do not include exclusively Vietnamese names, it nonetheless represents a broad selection of companies with deep exposure to the nation’s economy. Below, we’ll look at the top 10 holdings for this fund.

Top VNM Holdings
Company Name (Ticker) Percent of VNM Assets Description of Company
Vinhomes JSC (VHM:HSX) 7.9% Real estate developer
Vingroup JSC (VIC:HSX) 7.8% Real estate investment and operations
Joint Stock Commercial Bank for Foreign Trade of Viet Nam (VCB:HSX) 6.9% Commercial bank
Vietnam Dairy Products JSC (VNM:HSX) 6.5% Dairy product manufacturer and distributor
No Va Land Investment Group Corp. (NVL:HSX) 6.0% Real estate investment
BH Co. Ltd. (090460:KOE) 5.4% Circuit board manufacturer
MCNEX Co. Ltd. (097520:KOE) 5.2% Camera module manufacturer
Vincom Retail JSC (VRE:HSX) 5.1% Real estate investment and operations
Eclat Textile Co. Ltd. (1476:TAI) 4.9% Garment manufacturer and distributor
Mani Inc. (7730:TYO) 4.4% Medical equipment manufacturer

Source: Investopedia

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