James Carthew: Why are Vietnam trusts floundering whilst the economy booms?
The three specialist Vietnam trusts have delivered lacklustre returns despite the country’s soaring economy.
The Vietnamese economy has been offering some exciting growth opportunities, but the five-year returns on the three specialist investment companies – Vietnam Enterprise (VEIL), VietNam Holding (VNH), and VinaCapital Vietnam Opportunity (VOF) – are a bit lacklustre, and a quick glance at their factsheets reveals that they have been underperforming local benchmarks by a wide margin. What is going on?
There are two big factors that have affected returns. The first of these is the ongoing withdrawal of capital from the stock market by foreign investors, which runs counter to the overall trend of significant foreign investment in Vietnam’s economy. Foreign direct investment hit a record $27.6bn in 2025.
The other is the remarkable performance of a single stock – Vingroup – which was trading just above VND20,000 in February 2025 and is now above VND220,000, the largest constituent of Vietnamese benchmark indices, and trading on well over 100x current year earnings. All three funds are significantly underweight Vingroup, for reasons I come on to.
The Vietnamese growth story is remarkable. VietNam Holding observes that the economy is about 10x larger than it was in 2005, having launched in 2006). Vietnam has a young, educated population, increasing urbanisation, and has become a global manufacturing hub.
However,… read more here