Vietnam's Investment Landscape Shifts: Equity Funds See Record Outflows, Bond Funds Attract Inflows
Vietnam's investment landscape witnessed a significant shift in August, with equity funds experiencing their largest outflow in two years while bond funds attracted substantial inflows. Domestic investors primarily drove the bond funds' growth, while Thai investors significantly contributed to the equity funds' decline.
Over the past year, bond funds have drawn nearly VND6.5 trillion ($246.04 million), predominantly from domestic investors. Meanwhile, equity funds have witnessed net withdrawals of nearly VND65 trillion ($2.46 billion) over the past two years, which is equivalent to 45% of foreign investors' total net selling on the stock market.
In August, equity funds recorded a net outflow of VND7.6 trillion ($287.67 million), the largest in two years. The largest outflows came from Fubon FTSE Vietnam ETF, K Vietnam Equity, and VEIL, with Thai investors selling VND643.7 billion and VND938.4 billion of DRs based on DCVFMVN30 and DCVFMVN Diamond respectively, accounting for a majority of the funds' outflows. Large-cap stocks such as banks (ACB, VCB, TCB) and retailers (MWG) were targeted by Thai investors for selling. Despite this, 27 funds had net inflows of VND793 billion ($30.02 million), and 21 funds reduced their cash ratios, indicating a more positive sentiment among fund managers.
Contrasting with equity funds, bond funds posted a net inflow of VND759 billion ($28.76 million) in August, led by large funds like MBAM. MBB was the most bought stock by funds in August, with PYN Elite increasing its stake to 11.8%, while TCB and ACB continued to be sold.
August marked a turning point for Vietnam's investment scene, with bond funds attracting significant inflows and equity funds facing substantial outflows. Thai investors played a significant role in the equity funds' decline, targeting large-cap stocks for selling. Despite the overall outflow, fund managers' sentiment remains positive, as indicated by the reduction in cash ratios. As the market evolves, investors will continue to monitor these trends and adjust their strategies accordingly.
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