New York-based Global X has expanded its international equity suite with the launch of an ETF providing exposure to Vietnamese equities.
Global X has launched a new International Access ETF providing broad market exposure to Vietnam.
The Global X MSCI Vietnam ETF (VNAM US) has been listed on NYSE Arca with an expense ratio of 0.50%.
Vietnam has experienced rapid and dynamic economic growth in the past couple of decades – the World Bank reports an average GDP growth rate of 6.34% between 2000 and 2021 – on the back of economic and political reforms that have progressively opened up the socialist-oriented economy to market forces.
Indeed, Vietnam was one of only a handful of countries to experience positive GDP growth in 2020, highlighting its resilience during the Covid-19 pandemic.
Global X notes several positive trends that are expected to continue to put wind into the sails of Vietnam’s economy. These include a competitive manufacturing sector, ambitious digital economy development goals, and a strong position in global trade.
Dillon Jaghory, Research Analyst at Global X, said: “Vietnam is a manufacturing powerhouse, particularly in the production of smartphones and computer parts. Additionally, Vietnam’s relatively young and tech-savvy population is spurring the take-off of the country’s digital economy, while its position by the South China Sea has enabled its emergence as an important trade hub.
“Given that Vietnam’s economic reforms and growth have captured global attention, Global X is leveraging our deep history in International Access ETFs to bring investors efficient access to a basket of Vietnamese securities.”
The fund is linked to the MSCI Vietnam IMI Select 25/50 Index which consists of large, mid, and small-cap securities listed in Vietnam.
Constituents are weighted by float-adjusted market capitalization while applying a liquidity-based discount that reduces the weight of thinly traded stocks. Additionally, the largest stock in the index is capped at 25%, and the cumulative weight of stocks representing more than 5% is capped at 50%.
As of year-end 2021, the index contained 57 constituents. Nearly one-third (32.7%) of the total weight was allocated to real estate stocks with the next-largest sector exposures being consumer staples (17.4%), financials (16.7%), materials (15.2%), and industrials (12.9%).
Notable positions included Hoa Phat (10.3%), VinGroup (8.6%), VinHomes (8.5%), Masan (6.7%), Vietnam Dairy Product (6.5%), and No Va Land Investment (5.1%).
Global X’s international equity line-up now consists of 22 ETFs including funds on various Chinese sectors, as well as single-country and regional strategies targeting parts of Asia (South East Asia, Pakistan, and Vietnam), Europe (Germany, Greece, Norway, and Portugal), South America (Argentina and Colombia), and Africa (Nigeria). Collectively, the ETFs house around $1.1 billion in assets.