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Chinese asset manager CSOP launches Vietnam ETF on the Hong Kong stock exchange

CSOP Asset Management Limited has announced the listing of CSOP FTSE Vietnam 30 ETF (3004.HK) on the Hong Kong Stock Exchange.

The firm writes that 3004.HK will adopt a combination of physical and synthetic representative sampling strategy, investing up to 100 per cent of its net asset value in a representative portfolio of securities that collectively has a high correlation with FTSE Vietnam 30 Index, to achieve its investment objective. With listing price at around HKD7.8 per unit, trading lot of 100 shares and annual management fee of 0.99 per cent, 3004.HK will start to trade on 20 September 2022. Upon inception, 3004.HK has received around USD 6.5 million initial investment.

The firm writes that, supported by a favourable global and domestic environment, Vietnam’s GDP explosively expanded 15 times in the past 25 years. Vietnam is also the only Southeast Asian country that achieved positive economic growth for the most recent two consecutive years from 2020 to 2021 amid Covid-19, the firm says.

Vietnam’s fast-growing economy and equity market have been driven by multiple factors including continuous inflows of foreign direct investment (FDI), stable domestic political environment equipped with renovation policies, and together with a favourable demographic structure.

The Vietnam’s FDI has been steady ever since it joined WTO in 2007. The FDI continues to grow with compound annual growth rate (CAGR) of registered capital as high as 8 per cent.

The firmwrites that Vietnam has been on the minds of many investors such as Apple, LG, and Panasonic who choose Vietnam to diversify their manufacturing operations. To stimulate the economy, Vietnam has also launched a series of policies that promote development such as “Renovation Policy” including income tax incentive introduced in January 2015 for manufacturing enterprises. From a demographic perspective, Vietnam has nearly 100 million population aged from 15 to 60 with a 95 per cent literacy rate. The young population and low urbanisation rate reflect potential, the firm says. With all these advantages in consideration, International Monetary Fund (IMF) forecasted that Vietnam will be one of the fastest growing economies in Southeast Asia.

The FTSE Vietnam 30 Index comprises the largest 30 Vietnam companies by full market capitalisation that are traded on Ho Chi Minh Stock Exchange. It comprehensively covers sectors including real estate, consumer stables, industrials and financials, which can capture the essence of Vietnam economy while reducing volatility. The index is free-float adjusted and liquidity screened, with the maximum weight of constituents of the Index capped at 10 per cent. FTSE Vietnam 30 Index achieved a positive return of 19 per cent in 2020, doubled to 38 per cent in 20218.

Ding Chen, CEO of CSOP comments: “Leveraging on our time-tested ETF management expertise, CSOP is confident to introduce this Vietnam-themed ETF product, focusing on access to the frontier market, to Hong Kong investors. We look forward to bringing more new concept ETFs to Asia, the fast-growing ETF market, with various cost-effective options for investors to diversify their portfolios.”

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