Korea Investment Management Recommends Two Vietnam Funds on Hopes of FTSE EM Inclusion

On October 2, Korea Investment Management recommended two of its funds that invest in the Vietnamese stock market ahead of the announcement regarding Vietnam's potential inclusion in the FTSE Emerging Markets (EM) Index. The recommended products are the Korea Investment Vietnam Growth Fund and the ACE Vietnam VN30 (Synthetic) Exchange-Traded Fund (ETF).

Launched in 2016, the Korea Investment Vietnam Growth Fund invests in high-quality cyclical and consumer stocks that are expected to benefit most from Vietnam's economic growth. The fund's top holdings include Vingroup, Vietinbank, Vinhomes, and Vietcombank.

A key strength of the fund is Korea Investment Management's operational expertise. Since establishing a research office in Ho Chi Minh City, Vietnam in 2006, the company has consistently managed Vietnam-focused funds. The research office was converted into a corporate entity in 2020 and currently employs over 30 staff members. The local research team collaborates on the management of both the Korea Investment Vietnam Growth Fund and the Korea Investment Vietnam Fund, which is the longest-running Vietnam fund in Korea.

The ACE Vietnam VN30 (Synthetic) ETF, listed in 2016, is the only Vietnam-focused ETF available in Korea. It is a passive product that tracks the VN30 Index, which is composed of 30 large-cap stocks listed on the Ho Chi Minh Stock Exchange, selected based on market capitalization, liquidity, and trading volume.

Both products stand to benefit if the Vietnamese stock market is included in the FTSE EM Index. FTSE will announce its decision on Vietnam's EM status in the "FTSE Annual Report" scheduled for release on October 7. Currently classified as a Frontier Market, Vietnam has been preparing for EM promotion by enacting legislation to introduce a central counterparty (CCP) and by raising the foreign ownership limit (FOL).

Kim Taemin, Head of Overseas Investment Management at Korea Investment Management, stated, "If the Vietnamese stock market is included in the FTSE EM Index, we expect a strong inflow of capital, especially into large Vietnamese conglomerates. As a result, the Korea Investment Vietnam Growth Fund and the ACE Vietnam VN30 (Synthetic) ETF, which both include these stocks, are also expected to benefit."

He added, "The Korea Investment Vietnam Growth Fund allows investors to leverage Korea Investment Management's nearly 20 years of experience in discovering Vietnamese stocks. The ACE Vietnam VN30 (Synthetic) ETF is highly useful for pension accounts and other purposes due to its trading convenience and lower fees compared to active funds."

All products mentioned in this article are performance-based and may result in a loss of principal depending on investment results.

This content was produced with the assistance of AI translation services.