Categories: Asia

ETF Talk: Vietnam is another Asian Alternative

The past few weeks have taken us on a tour of investment opportunities in Asia and we now turn to Vietnam. The country is an agriculturally based, developing economy. Despite massive government interference, Vietnam is on-track for 5.65% growth this year. One way to invest in Vietnam is with the Market Vectors Vietnam ETF (VNM).

This non-diversified fund attempts to track the growth and performance, before fees and expenses, of an index of securities of Vietnamese companies. A company is considered Vietnamese if it is incorporated in Vietnam or if it generates at least 50% of its revenues or holds 50% of its assets there.

After enduring a slump this summer, VNM shares are up nicely from their August low. Last year, the fund logged a stellar performance of 23.71%. That return shows just how powerful the upside can be in the emerging markets of Asia.

The top 10 holdings in VNM’s portfolio account for 59.47% of its assets. These holdings include: Bank for Foreign Trade of Vietnam JSC, 9.06%; Vingroup Joint Stock Company, 7.65%; Petrovietnam Fertilizer and Chemicals Corp., 7.05%; Bao Viet Holdings, 6.51%; and PetroVietnam Technical Services Corp., 5.26%. Key sectors in which VNM is invested include financials, 37.5%; energy, 23.1%; and industrials, 11.7%. It also is invested in materials, consumer discretionary and consumer staples.

Vietnam’s central plan includes a future focused on exports. The country is turning from a focus on agriculture (Vietnam is a lead producer of rice) and oil (Vietnam is the biggest producer in the region) to reorient towards manufacturing. If you want to follow this investment path, consider Market Vectors Vietnam ETF (VNM).

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Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/