Vietnamese Investment Funds to Mushroom

At present, Vietnam has only three local investment funds, including VF1, Vietcombank 1 and VIF while the number of foreign investment funds operating in Vietnam is four times higher, with VOF, VGF, VIEL, VDF, PXP, MEF, VEF, Kanm Investment and Dragon Capital. Alongside the establishment of fund management companies of many investment organisations in the coming time, local investors will have more options.

 

With the increased supply in the stock market, the establishment of investment funds for mobilising unused money sources to invest in securities will help balance the demand and supply in the market. In July, three funds, including the Bao Viet Investment Fund (BVF1), the Prudential Public Investment Fund and Vietcombank 2 Fund were launched.

 

The Bao Viet Investment Fund, established by the Bao Viet Fund Management Company (BVFMC) with a total capital of VND 500 billion, was launched on July 21. BVF1 was established in the form of member fund with capital contributed by six insurance enterprises, among which the Vietnam Insurance Corporation holds a dominant role. Dang Thi Hong Phuong, director of BVFMC, said that in late July BVF1 would disburse its mobilised capital, mainly investing in stocks, in particular unlisted stocks. So far, the members of BVF1 have completed their capital contribution to the supervision bank (HSBC), so VND 500 billion of the fund would be ready for being disbursed after the fund receives a licence from the State Securities Commission. Phuong said that it was expected that in 2007, BVFMC would establish a public investment fund to provide new investment instruments, which are a result of the combination of insurance and investment products.

 

The Prudential Public Investment Fund, established by the Prudential Fund Management Company, is expected to be launched in late July with an estimated capital of around VND 500 billion. According to many economic experts, the Prudential Fund Management Company is managing a huge amount of insurance fees of the parent company of around VND 700 billion, so the company has gained much experience in the Vietnamese capital and securities markets. Robert Rountree, director of investment service of the Prudential Asia Fund Management Company, said that money of investors would be invested in many companies and various fields, thus diversifying portfolio and minimising risks.

 

The Vietcombank 2 Fund was established by the Vietcombank Securities Investment Fund Management Company (VCBF) with a total capital of US$60 million, contributed by Vietnamese and foreign investors. Vietcombank 2 had its procedures for establishment completed and will be launched very soon. According to VCBF, Vietcombank 2 would concentrate on investing in unlisted enterprises in oil and gas, banking and insurance, information technology and telecommunication. Also, VCBF is planning to establish a public investment fund in 2007.

 

Furthermore, some other investment funds will be established in the coming time. Accordingly, a file of documents of the MB Fund Management Company submitted to the State Securities Commission has been basically completed and the company is expected to establish a member fund with VND 200 billion. The documents for the establishment of an investment fund of the An Binh Commercial Joint stock Bank’s Fund Management Company has been submitted to the State Securities Commission.