[Vietnam] The most attractive emerging market for UK investors

New research has revealed that retail investors are turning to Vietnam as the top frontier or emerging market most likely to offer long-term returns.

The survey of UK retail investors by Dragon Capital found two-thirds consider Vietnam the most attractive frontier or emerging market. That positive sentiment was bolstered by International Monetary Fund predictions of 6.7 per cent GDP growth for the country this year. 

India was the next most popular with 46 per cent reportedly favouring the emerging market, followed by China (38 per cent) and Thailand (29 per cent). 

Nearly half (48 per cent) of UK retail investors say they would consider making their first investment in Vietnam-focused funds following the IMF’s optimistic outlook for Vietnam’s economic growth. Five per cent plan to increase existing allocations. 

A host of factors are behind confident growth predictions for the southeast Asian country. These reportedly include its stable political system; relatively low inflation; strong workforce; and a large and growing domestic market which have motivated major overseas companies including Apple and Lego to set up manufacturing plants in Vietnam. 

Half of the respondents (51 per cent) said this influx of foreign direct investment (FDI) makes investing in Vietnam a more attractive proposition.  

In addition, UK retail investors were encouraged by the strengthening of trade relations between the UK and Vietnam. More than half (58 per cent) say the UK-Vietnam Free Trade Agreement (UKVFTA) - which came into effect in 2021 and has boosted the level of trade between the two countries dramatically - will lead to more UK investors investing in funds that have exposure to Vietnam. 

Launched in 1995, Vietnam Enterprise Investments Limited (VEIL) is the longest-running fund focused on Vietnam and one of the largest investing primarily in listed and pre-IPO companies that offer attractive growth and value metrics and strong corporate governance. VEIL seeks long-term capital appreciation through strategic holdings in listed and pre-IPO companies that offer both attractive growth and value metrics, and strong corporate governance. 

VEIL reportedly allows investors to access Vietnam’s leading blue chips, including many companies that have reached their limit for foreign ownership.  

VEIL’s top holdings are diversified and include high-quality banking, retail, industrial park and software stocks which offer stable long-term growth potential, benefitting from the increase in FDI and Vietnam’s own strong domestic growth. 

Dien Vu - VEIL’s Portfolio Manager - said, “It is encouraging that so many UK retail investors recognise the attractive future growth potential from Vietnamese stocks, which may be a recognition of the current market valuation hovering around decade-lows despite being in one of the fastest growing economies globally. 

“It is clear that more international companies want to diversify manufacturing from China and see Vietnam as an obvious base from which to capitalise on the country’s burgeoning market. This is even more true for investors in the UK, as trade relationships deepen between Britain and Vietnam.”  

Source: Dragon Capital

New research has revealed that retail investors are turning to Vietnam as the top frontier or emerging market most likely to offer long-term returns.

The survey of UK retail investors by Dragon Capital found two-thirds consider Vietnam the most attractive frontier or emerging market. That positive sentiment was bolstered by International Monetary Fund predictions of 6.7 per cent GDP growth for the country this year. 

India was the next most popular with 46 per cent reportedly favouring the emerging market, followed by China (38 per cent) and Thailand (29 per cent). 

Nearly half (48 per cent) of UK retail investors say they would consider making their first investment in Vietnam-focused funds following the IMF’s optimistic outlook for Vietnam’s economic growth. Five per cent plan to increase existing allocations. 

A host of factors are behind confident growth predictions for the southeast Asian country. These reportedly include its stable political system; relatively low inflation; strong workforce; and a large and growing domestic market which have motivated major overseas companies including Apple and Lego to set up manufacturing plants in Vietnam. 

Half of the respondents (51 per cent) said this influx of foreign direct investment (FDI) makes investing in Vietnam a more attractive proposition.  

In addition, UK retail investors were encouraged by the strengthening of trade relations between the UK and Vietnam. More than half (58 per cent) say the UK-Vietnam Free Trade Agreement (UKVFTA) - which came into effect in 2021 and has boosted the level of trade between the two countries dramatically - will lead to more UK investors investing in funds that have exposure to Vietnam. 

Launched in 1995, Vietnam Enterprise Investments Limited (VEIL) is the longest-running fund focused on Vietnam and one of the largest investing primarily in listed and pre-IPO companies that offer attractive growth and value metrics and strong corporate governance. VEIL seeks long-term capital appreciation through strategic holdings in listed and pre-IPO companies that offer both attractive growth and value metrics, and strong corporate governance. 

VEIL reportedly allows investors to access Vietnam’s leading blue chips, including many companies that have reached their limit for foreign ownership.  

VEIL’s top holdings are diversified and include high-quality banking, retail, industrial park and software stocks which offer stable long-term growth potential, benefitting from the increase in FDI and Vietnam’s own strong domestic growth. 

Dien Vu - VEIL’s Portfolio Manager - said, “It is encouraging that so many UK retail investors recognise the attractive future growth potential from Vietnamese stocks, which may be a recognition of the current market valuation hovering around decade-lows despite being in one of the fastest growing economies globally. 

“It is clear that more international companies want to diversify manufacturing from China and see Vietnam as an obvious base from which to capitalise on the country’s burgeoning market. This is even more true for investors in the UK, as trade relationships deepen between Britain and Vietnam.”  

Source: Dragon Capital