VietNam Holding (VNH) aims to deliver long-term capital growth, primarily through investing in listed companies in Vietnam. The fund is also permitted to invest in unlisted companies, which in practice are those that have visible near-term plans to list. The fund has undergone significant changes since September 2017, including the appointment of a new board and manager, Dynam Capital Limited. These changes were implemented to address governance issues associated with the previous board and manager, which contributed to VNH’s wider-than-peers discount to NAV. Vietnam’s medium- to long-term economic outlook is one of the brightest in the Asia Pacific region and investors looking for exposure to its rapid growth may find the restructured VNH of interest.
Vietnam is one of the world’s fastest-growing economies. Its GDP grew by 7.1% in 2018 and the International Monetary Fund (IMF) expects it to grow at an annual compound rate of 6.5% between 2019 and 2024. Positive secular trends, including a very favourable demographic profile and the ability to attract foreign direct investment, help underpin multi-year earnings growth prospects for its companies.
Disciplined, fundamental investment approach with emphasis on environmental, social and governance (ESG) awareness. Relatively concentrated portfolio of 20–25 high-conviction stocks. Its size enables VNH to invest in small- and mid-cap companies that are less well discovered and whose managements are more open to engagement. New board is committed to promoting shareholders’ interests.
VNH trades at a 19.0% discount to its NAV, which is the widest among its Vietnamfocused peers. The new board has implemented several changes over the past two years aimed at restructuring and broadening the appeal of the fund. In conjunction with early signs of improving investment performance, there is scope for the discount to narrow.