Investment trust insider on VinaCapital Vietnam Opportunity – James Carthew: Trump is not too much trouble for my Vietnam trust
James Carthew says he is sticking with VinaCapital Vietnam Opportunity and may even add to the £624m trust, after an update from the managers on the effect of the Trump administration.
Trump’s trade policies have caused anger and confusion in many different parts of the world. China was an obvious target, but many other emerging markets could also be affected. One name that keeps coming up – because of the phenomenal growth in its exports to the US in recent years – is Vietnam. In 2024, the US imported goods worth $136.6bn from Vietnam and exported just $13.1bn to the country.
The managers of VinaCapital Vietnam Opportunity (VOF) held a webinar recently that was aimed at helping investors assess the risk of this. The webinar was led by Khanh Vu, the recently appointed lead manager for the trust, and the manager’s in-house economist, Mike Kokalari.
Mike feels that the push for protectionist policies coming out of the US would also have been an issue had the Democrats won the election. Halting and reversing the hollowing out of US manufacturing jobs, or at least being seen to be trying to achieve this, is a vote winner in marginal states. He paints a picture whereby, over many years, asset owners shifted jobs to countries with cheaper labour, enhancing their profits, which were then repatriated to the US, keeping the dollar strong. He feels that this has contributed to the dollar being overvalued by something like 25-30%.
Trump wants to lower the value of the dollar and there has been talk of a Plaza Accord 2.0, where big countries would work together to manipulate the currency lower. The problem is that… read more here