VietNam Holding (VNH) has released its interim results for the six months to 31 December 2024, delivering a period of solid performance marked by NAV growth, a successful redemption event, a narrowing discount, and a clutch of industry awards. The trust continues to benefit from a supportive Vietnamese macroeconomic backdrop and focused portfolio management.
NAV edges higher, outpacing benchmark
During the reporting period, VNH’s NAV per share rose 1.9% to USD 5.234, outperforming the Vietnam All Share Index (VNAS), which gained 1.6%. The share price climbed 1.2%, reaching an all-time high, and the discount to NAV narrowed materially – so much so that the trust was able to issue new shares at a premium for the first time in over a decade.
Redemption facility successfully implemented
The half-year also marked the successful implementation of VNH’s inaugural annual redemption facility, which saw approximately 12% of VNH’s shares redeemed in a smooth and orderly process. VNH comments that the success of the facility reflects both the trust’s commitment to liquidity and ongoing investor confidence in the strategy. Despite the redemption, the portfolio’s performance remained stable, and the manager believes this underscores the robustness of the fund’s underlying holdings.
Discount narrows amid improving sentiment
One of the more notable developments over the period has been the material narrowing of the fund’s discount to NAV, which, as has been well-documented on this website, is a significant issue for many closed-end funds. The introduction of the redemption facility has no doubt played a significant part in this and the board also credits improved investor sentiment, better relative performance, and consistent shareholder engagement for the move. During the period, the fund was able to issue new shares – a rare milestone – signalling renewed interest in VNH and Vietnam’s growth story more generally.
Macro conditions supportive; infrastructure and FDI drive growth
Vietnam’s macroeconomic environment has proved highly supportive. Full-year GDP growth came in at 7.09%, ahead of government forecasts and well above 2023’s 5.05% expansion. Infrastructure spending hit a record USD 26.5bn, bolstered by the opening of Ho Chi Minh City’s first metro line and plans for a high-speed rail network connecting Hanoi and HCMC.
FDI also remained robust, with USD 38.2bn registered for the year and USD 25.4bn disbursed. New policies have enhanced Vietnam’s appeal as a hub for high-tech investment, with a potential USD 1.5bn investment from SpaceX’s Starlink cited as a key example of growing international interest in the country’s digital economy.
Portfolio positioning and top performers
The fund’s concentrated, conviction-led portfolio delivered a full-year NAV return of 16.5%, beating the VN All-shares return of 10.2%, even after accounting for a 4.8% devaluation in the Vietnamese Dong.
Top contributors included FPT Corporation (FPT), the fund’s largest technology holding, which delivered approximately 85% share price growth in 2024. Consumer names like FRT, a leader in Vietnam’s pharmaceutical retail sector, rose over 70% during the year, while Mobileworld (MWG), which accounts for 8% of NAV, saw earnings rebound strongly.
The fund’s banking exposure – about 36% of the portfolio – also performed well. Earnings per share growth across the sector came in at 15–20% for 2024, and similar levels are forecast for 2025. Valuations remain attractive, with banks trading at approximately 1x price to book.
Industrials, particularly those exposed to logistics and infrastructure, also benefited from heightened project activity and are expected to be key beneficiaries of ongoing government spending initiatives.
Awards highlight performance and ESG credentials
The trust’s efforts were recognised with multiple awards during the period, including:
- Citywire Investment Fund of the Year (Single Country – Emerging Market),
- Investment Week Investment Trust of the Year, and
- UK Investor Magazine Country Fund of the Year.
On the ESG front, VNH’s long-standing commitment continues to deliver results. The trust received top scores in the latest PRI Transparency Report – 92% for governance and strategy, 93% for listed equity, and a perfect 100% for confidence-building measures.
Outlook: cautiously optimistic amid geopolitical uncertainty
Looking ahead, the board and manager remain cautiously optimistic. The Vietnamese government has set a GDP growth target of 8% for 2025, supported by rising FDI, robust infrastructure plans, and a stable interest rate environment. However, geopolitical uncertainty, particularly the implications of Donald Trump’s return to the US presidency, could pose risks to trade and emerging market flows.
Nonetheless, VNH’s active, on-the-ground investment approach and increased portfolio flexibility (following shareholder approval of higher concentration limits) position the trust well to navigate both challenges and opportunities.
[QD comment MR: Vietnam Holding continues to demonstrate that a focused strategy in a fast-growing economy can deliver meaningful shareholder returns. The redemption facility has been a success, helping to narrow VNH’s discount to NAV at a time when the sector is struggling with discounts generally. The certainty offered by the redemption facility, coupled with VNH’s strong performance, has helped push VNH to a premium rating, allowing it to issue stock and start to grow. Along with the external validation from awards and ESG ratings, VNH appears well-placed heading into 2025.]
