PUBLIC EQUITIES & FIXED INCOME - Thu Nguyen, CFA, Head of Investment 29 October 2020
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PUBLIC EQUITIES & FIXED INCOME
Thu Nguyen, CFA, Head of Investment
29 October 2020
Classified: Public
VinaCapital Traditional Assets Product Platform
Offshore products Domestic products
VVF VESAF VEOF
VIBF VFF
VAF
ETF VN100
Segregated Mandates
Equity Fixed Income
Equity fund
2| Fixed income fund
Balanced fund Classified: Public
Portfolio Management Team ThuNguyen, CFA
Head of Investment
• Lead Portfolio Manager of VVF and VAF
• 17 years of investment experience
• 5 years with VinaCapital
Phuong Nguyen Minh Dinh Thang Pham, CFA
Thao Ong, CFA
Senior Investment Manager Investment Director Senior Associate
Investment Director
• Manages VEOF and ETF VN100 • Manages VFF and VIBF
• Manages VVF and VIBF • Manages VAF and VESAF
• 11 years of investment experience • 10 years of investment experience
• 13 years of investment experience • 9 years investment experience
• 4 years with VinaCapital • 1 year with VinaCapital
• 9 years with VinaCapital • 6 years with VinaCapital
Nguyen Tran, CFA Phuong Nguyen, MSc. Huong Nguyen
Assistant Portfolio Manager Assistant Portfolio Manager Assistant Portfolio Manager
• 7 years of research & investment • 8 years of research & investment • 5 years of research & investment
experience experience experience
• 7 years with VinaCapital • 2 years with VinaCapital • 3 years with VinaCapital
3|
Classified: Public
Investment Philosophy
We are growth-oriented investors that seek to capture and
participate in Vietnam’s structural economic growth
We focus on bottom-up stock selection but also apply a top-down
overlay of macro and policy views
We have an absolute return mentality, which is reflected across
stock selection, portfolio management and risk management
We are high-conviction investors that often take large, long-term, off-
benchmark bets in concentrated portfolios
We pursue the highest standards of integrity and corporate
governance with risk mitigation, and we are aware of social
responsibility in investing
4|
Classified: Public
Investment Process
• 1,600 listed stocks: size & liquidity
Screening • Financial strength
• ESG
• 100 listed stocks
Investment Universe • Company visits
• Due-diligence
Company Analysis • Financial modeling & valuation
• Biased towards growth and strong cashflow
Discipline
• Conviction
Portfolio • Risk awareness: correlation, volatility
Construction • Comply with mandate restrictions
• Company performance
• Macro, sector-related
Portfolio Monitoring • Company meetings
• Internal reporting
• Target price
• Exogenous event/change in fundamentals
• Corporate governance
• Strategic exit at premium
• Observing mandate restrictions (e.g. UCITS)
5|
Classified: Public
Forum One – VCG Partners Vietnam Fund (VVF)
Growth at reasonable price (GARP)
• P/E 2020 of VVF: 12.3x versus 16.9x of VN-Index
• EPS growth 2020 of VVF: 5.9% versus -12.0% of VN-Index
Index-agnostic
• Small- & mid-cap stocks: 55% NAV versus 29% of VN-Index
• FOL stocks: 35% NAV
• Active shares: 60%
Active management
• 160 meetings with investee companies per year on average
Fund data as of 30 September 2020
6|
Source: VinaCapital, Bloomberg
Classified: Public
Vietnam Access Fund (VAF)
Small- & mid-caps focus
Foreign Investors • Small- & mid-cap stocks: 63% NAV versus 29% of VN-Index
FOL stocks focus
VAF • FOL stocks: 50% NAV
(Cayman Islands)
Reasonable valuation
Up to
100%
• P/E 2020 of VAF: 10.9x versus 16.9x of VN-Index
• EPS growth 2020 of VVF: 6.5% versus -12.0% of VN-Index
VESAF Direct investments • Active shares: 70.5%
(Vietnam open-ended
fund)
IPOs and Pre-IPOs
Listed equities
Active management
FOL stocks
High-growth Small- & Special situation stocks
Other financial instruments • 200 meetings with investee companies per year on
mid-caps
average
Fund data as of 30 September 2020
7|
Source: VinaCapital, Bloomberg
Classified: Public
Foreign Ownership Restrictions In Vietnam Stock Market
VN-Index From 2022 (expected):
1,300 NVDR introduced
Jun 2015:
companies Jan 2021: New
allowed to Securities Laws
1,100
determine own effective
FOL
900
Apr 2009: FOL cap
increased to 49%
for most; Banks
700 2000: FOL stay at 30%
cap at 20%
Jan 2016: apply
500
T+2
Jul 2003: FOL cap
increased to 30%
300
100
8| Source: Bloomberg
Classified: Public
State Divestments And Privatisations
State IPOs & placements (USDm)
6,000
5,566
5,000
4,000
3,000
2,000
1,344
1,000 827
327
-
2016 2017 2018 2019
9| Source: Ho Chi Minh City Securities Company (HSC)
Classified: Public
VN100 ETF and Fixed Income Classified: Public
VN100 – The Closest Tracker Of VNIndex, Accounting For 84%1 Of VN-Index
Performance of VN Index, VN100 and other ETF indexes (USD terms)
VN100 VN-INDEX VN30 FTSE Vietnam MVIS Vietnam MSCI Vietnam
350
300
VN-Index
250
VN100
200
150
100
50
2012 2013 2014 2015 2016 2017 2018 2019 2020
1:as of 30 September 2020
11|
Source: Bloomberg
Classified: PublicFixed Income Market: Steady Growth
Bond market size as a percentage of GDP
45%
40%
35% 13%
9% 11%
30%
7%
5%
25%
Corporate Bond
20% Government Bond
15%
28% 27% 28%
24% 25%
10%
5%
0%
2016 2017 2018 2019 1H2020
12| Source: Hanoi Stock Exchange, Fiinpro
Classified: PublicGovernment Bond Yields And Corporate Bond Yields
Government bond yields have declined to all-time low level due Corporate bonds offer attractive yield, while FX risk is low
to surplus liquidity
Government bond yields (%) Corporate bond yields by sector (%)
3Y 5Y 10Y 15Y 2019 1H20
12.0
10.6
6.0
10.4
10.3
10.3
10.2
9.5
10.0
9.2
5.0
8.2
4.0 8.0
7.0
6.7
3.0 6.0
2.0
4.0
1.0
2.0
0.0
0.0
Real Estate Energy Financials Banks Others
13| Source: Hanoi Stock Exchange, Fiinpro
Classified: PublicCorporate Bonds: Increasingly Diversified Base of Issuers And Investors
Investor Profile Issuer Profile
2%
2%
12% 7%
3%
4%
32%
6% 36% 6%
2%
3%
30%
17%
39%
Banks Financials Real Estate Industrials
Banks Securities Insurers Funds Retail Foreigners Others
Consumer Staples Energy Mining Others
Credit rating
• Sovereign rating: Below investment grade (S&P: BB; Moody’s: Ba3)
• Corporate bonds: No rating
Chart note: New issuance in 2019
14|
Source: Ministry of Finance, Hanoi Stock Exchange, Fiinpro
Classified: PublicDisclaimer
The information contained herein has been prepared by VinaCapital (the “Company") and is subject to updating, completion, revision, further verification and amendment without notice.
The information contained herein has not been approved by any listing authority or any investment regulator. The information does not constitute or form part of any offer for sale or
solicitation of any offer to buy or subscribe for any securities nor shall they or any part of them form the basis of or be relied on in connection with, or act as any inducement to enter into,
any contract or commitment whatsoever.
No undertaking, representation, warranty or other assurance, expressed or implied, is made or given by or on behalf of the Company or any of its directors, officers, partners, employees,
agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained herein and no responsibility or liability is accepted by any of them for
any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise for any other communication written or otherwise.
The information herein may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. By accepting receipt of this document, you
agree to be bound by the limitations and restrictions set out above.
Neither these pages nor any copy of them may be taken or transmitted into or distributed in any jurisdiction where the distribution of such material would be prohibited under the
jurisdiction’s applicable securities laws. Any failure to comply with this restriction may constitute a violation of national securities laws.
Past performance is not a guarantee of future returns.
15|
Classified: Public17th Floor, Sun Wah Tower
115 Nguyen Hue, District 1, Ho Chi Minh City, Vietnam
P: +84 (0) 28 3821 9930 F: +84 (0) 28 3821 9931
Email: ir@vinacapital.com
Website: www.vinacapital.com
Ho Chi Minh City | Hanoi | Singapore |
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