Vietnam Opens First Ever UCITS Equity Fund
Sept. 25 – This week, Ho Chi Minh City-based firm Dragon Capital launched the first Undertakings for Collective Investment in Transferable Securities (UCITS) equity fund ever to exist in Vietnam to give foreign investors further access to Vietnam’s fast growing market.
UCITS refers to the directive that was originally undertaken by the European Union to create a framework for the regulation of investment vehicles, which has now become a globally recognized standard for such funds.
In explaining why they opened the fund, Dominic Scriven, CEO of Dragon Capital, described Vietnam as having “ideal demographics, an increasingly skilled labor force, a strong work ethic, political stability and ongoing FDI.”
“We firmly believe that the Vietnam equity UCITS fund will provide investors with a compelling mix of strong returns and an opportunity to diversify their risks,” Mr Scriven added.
Dragon Capital’s fund will primarily invest in companies listed on the Vietnam stock exchange and also incorporate a mix of companies with large exposure to the country as well as local sovereign and corporate bonds.
Vietnam is increasingly seen as an important investment destination in Asia, with the Vietnam Index having seen risen by more than 23 percent over the past year. Further, the country is undergoing a number of changes to its regulatory infrastructure that have allowed for, among other things, the creation of open-ended and exchange traded funds run by domestic investment managers such as Dragon Capital.
Further, another major change was the recent 10 percent raise on the foreign ownership cap on listed companies from 49 percent to 59 percent.
Virginie Maisonneuve, head of global equities at British financial company Schroders, believes that Vietnam is “potentially a good growth market with an improving economy and a young population.”
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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