South Korean investors have been continuously upping their investment in Vietnamese equity funds on expectations for benefits from a trade dispute between the United States and China and the Southeast Asian country’s stable economic growth.
The rate of return of 20 Vietnamese equity funds with more than 1 billion won (US$823,250) of investor money over the past month stood at 1.11 percent as of Aug. 13, according to Seoul-based market tracking company FnGuide on Aug. 15. Among overseas equity-type funds, Vietnamese equity funds alone recorded a positive rate of return. Chinese, Russian and Brazilian funds recorded the earnings rate of -4.56 percent, -4.52 percent and -3.41 percent, respectively, over the same period. Japanese, European and North American equity funds also posted a negative return of -4.07 percent, -2.44 percent and -1.86 percent, respectively.
Vietnamese equity funds had a 7.94 percent rate of return since the beginning of the year. The figure is relatively lower than the earnings rate of Russia at 22.26 percent, North America at 20.22 percent and China at 19.09 percent over the same period. However, major countries’ equity funds registered a minus return rate due to a recent global stock market crash, while Vietnamese equity funds bucked the trend.
Lee So-yeon, an analyst of Korea Investment & Securities Co., said, “The global stock prices show a decline because of the intensifying trade dispute between the United States and China and the exchange rate war. However, the drop was limited in Vietnam. The 12-month forward earnings per share (EPS) of emerging Asian countries’ equities fell by 3.1 percent over the past month, while that of Vietnamese equities rose by 0.4 percent. In short, Vietnamese companies had a slight improvement in profitability.”
In addition, money continues to flow into funds investing in Vietnamese equities. The funds recorded a net inflow of 122.30 billion won (US$100.68 million) from January to August this year. All countries other than Vietnam had a net outflow of capital over the same period, including China with -684.40 billion won (US$563.25 million), North America with -200.40 billion won (US$164.92 million), Europe with -195.30 billion won (US$160.71 million) and Russia with -133.40 billion won (US$109.78 million).