Premia Partners, a Hong Kong-based investment firm and exchange traded fund (ETF) issuer, on the 18th July 2019 unveiled the Premia MSCI Vietnam ETF (2804 HK/9804 HK) in a bid to provide access to investment opportunities in Vietnam at a low total-expense-ratio (TER) cost of 0.75% per annum.
The Premia MSCI Vietnam ETF aims to capture the leading large and mid-cap companies in Vietnam that represent approximately 85% of market capitalisation in the country and has a modest fund size of roughly USD 20 million. It will track the MSCI Vietnam Index. The Index comprises of 16 constituent stocks with a market capitalisation of approximately USD 18.04 billion, with the 10 largest constituents accounting for an aggregated weighting of 95.52% of the Index (as of June 2019).
The table below shows the Top 10 largest holdings in the Premia MSCI Vietnam ETF:
|Vietnam Dairy Products||18.08%|
|Hoa Phat Group||6.57%|
|Saigon Beer Alcohol Beverage||4.19%|
|Bank of Foreign Trade||4.15%|
|No Va Land Investment Group||3.19%|
* figures as of July 19th 2019. Full list can be found here.
The largest holdings in the ETF is Vingroup (21.63%), while Vietnam Dairy Products (18.08%) and Vinhomes (13.23%) also boast significant positions in the ETF. PetroVietnam Power Corp, which was recently added to the MSCI Frontier Market Index in May, has a 1.49% weighting in the fund.
In terms of sector exposure, Real Estate (46%) and Consumer Staples (29.73%) dominate in the Premia Vietnam ETF, while Utilities (2.92%) and Energy (1.17%) play a much smaller role in MSCI terms of exposure.
Rebecca Chua, the Managing Partner of Premia Partners, stated the following (according to hubbis.com):
“[the ETF will assist] investors (by providing) efficient market access and liquidity management tools as they position for opportunities amid market uncertainties, global supply chain reconfiguration, and new trade pacts including CPTPP and FTA with Vietnam.”
The launch of the Premia MSCI Vietnam ETF comes at a time where the growing tensions between the United States and China has forced investors to look elsewhere in Asia, with may beginning to focus their sights on Vietnam. Strong economic growth, improved macroeconomic conditions and positive credit ratings have also played a vital role in the increasing demand to gain exposure to the Vietnamese market.
The Premia MSCI Vietnam ETF adds to the list of Vietnam-focused ETFs offered by a small selection of ETF providers, including the VanEck Vietnam ETF (VNM) and the DB FTSE Vietnam UCITS ETF (XVTD). A full list of Frontier Market ETFs can be found here.