London, UK, 22 November 2023
Edison issues update on VinaCapital Vietnam Opportunity Fund (VOF): Continues to outperform its benchmark
VinaCapital Vietnam Opportunity Fund (VOF) posted a one-year NAV TR in US dollars to end-October 2023 of 13.1%, versus 2.8% for the VN Index, as a result of the rebound from last year’s market trough. VOF’s NAV TR since end-2022 of 9.1% was driven by financials and materials investments. Given the improving outlook for real estate and several of VOF’s portfolio companies in the sector, VOF reversed US$26.8m of the US$52.9m in write-downs recognised in the December 2022 interim report. VOF continues to pay out 1% of opening NAV in dividends, with the next payment due in December at US$0.07 per share, implying an annualised dividend yield of 2.4% based on the last closing share price.
VOF is an attractive play on Vietnam’s long-term growth story, while at the same time offering some downside protection during periods of short-term market headwinds, with 17.6% and 3.8% of its current portfolio made up of private equity and public equity with private terms, respectively. As a recent example, VOF did not have to write off its investment in a real estate project despite its default and was able to reschedule the payments and improve the collateral security in the form of real assets. Meanwhile, the macroeconomic outlook seems attractive, with increasing order books and reviving exports, while Vietnamese stocks remain relatively cheap, trading at 10.1x forward earnings (24% below their 10-year average), potentially providing an attractive entry point for investors.
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