Dragon Capital’s flagship fund Vietnam Enterprise Investment (VEIL) has floated on London’s Main Market in the midst of a strong comeback for overseas-focused funds.
The closed-ended fund first launched in 1995 and provides exposure to a portfolio of listed and unlisted companies in Vietnam that offer ‘attractive growth and value metrics and strong corporate governance’ according to Dragon Capital.
The fund’s switch from the Irish Stock Exchange to London looks well timed. Most of the 10 best performing investment trusts since the Brexit vote are focused on specific overseas markets. Investors are scrambling to diversify their portfolios amid concerns about the health of UK plc.
Top performer Utilico Emerging Markets (UEMS) has risen 27% since the Brexit news and has holdings in gas and airport operators and distributors abroad, including Malaysia Airports Berhad and China Gas.
JPMorgan Brazil Investment Trust (JPB) is another top performer with a focus on small and medium Brazilian companies. Its shares are up 19.5% in the past week and a half.
Vietnam Enterprise has increased by 81.3% in share price terms over the past five years. It charges a 2% annual management fee.
The top 10 holdings include firms that specialise in the dairy sector, industrial production, banking, oil and gas exploration, as well as the housing industry.
Investors need to be slightly cautious as dairy firm Vinamilk represents nearly one fifth of the entire fund.
If Vinamilk struggles or performs badly, this can easily bring down the value of the overall fund and compromise investments.
According to the International Monetary Fund, Vietnam’s gross domestic product (GDP) growth was 6.7% in 2015. This is expected to slow to 6.3% this year and moderate further to 6.2% in 2017, albeit still faster levels of growth than many other parts of the world.
VEIL has switched from being priced in US dollars to now being in sterling. It merged with Vietnam Growth fund in December 2015.
