PXP Vietnam Asset Management is set to close its two funds – the PXP Vietnam Emerging Equity Fund (PXP VEEF) and the PXP Vietnam Smaller Companies Fund (PXP VSCF) – in August this year and will also end its operation in the Vietnamese stock market after 16 years.
PXP confirmed that it will be closing the PXP VEEF and PXP VSCF in an emailed statement last week and will look to sell both portfolios for a combined total of $85 million, roughly a 7% premium for each stock in the portfolio. Both funds have been active for 16 years
Speaking to Vietnam Biz, Chief Executive Officer and Investment Director Kevin Snowball said the following:
“The fund has been operating for about 16.5 years on the Vietnamese stock market. The current size of the fund is no longer economically viable, so we will [sell the] fund.”
When asked about the possibility of setting up a new fund or returning to Vietnam, Snowball told Vietnam Biz that they will close the fund and it will be “the end of PXP”, confirming that the fund will no longer be in operation after the sale has been completed and the company will not launch a new Vietnam-focused fund.
Snowball also highlighted the that the Vietnam stock market still has a lot of potential, despite the short term hurdles that it is currently facing.
“Vietnam has very good control of the situation of the COVID-19 pandemic, now it is necessary to wait for other countries to act to follow the trend. Then a “new normal” trend will be established. Whether it happens or not, we have to wait.
Vietnam has done very well in the pandemic. Vietnam stock market is still very attractive to invest, especially in the long run.”
The first of the two funds that will be closed is the PXP Vietnam Emerging Equity Fund (PXP VEEF) which was launched in 2006. The objective of the fund was to seek long-term capital appreciation of its assets by investing in Vietamese companies. As of 29th April 2020, PXP VEEF has a net asset value (NAV) of $60.3 million and contains a portfolio of 25 securities (22 listed and 3 unlisted). The largest holdings in the portfolio are FPT Corporation (17.6%), MCMC Securities (17.3%), Hoa Phat Group (16.7%) and Vinamilk (13.3%). Its year-to-date share price has declined by 2.3%
The second fund is the PXP Vietnam Smaller Companies Fund (PXP VSCF) which primarily focuses on the long-term investment in smaller Vietnamese companies with a NAV between $20 million and $250 million at the time of investment and contains 23 companies. PXP VSCF has a NAV of $14.1 million and the top holdings in the portfolio include Dong Hai (12.7%), Vinh Hoan Corp (10.0%), Nam Long Group (8.3%), HCMC Securities (8.1%) and . Its year-to-date share price has decline by 9.74%