Why Active Bond ETFs are Sparking Mania Among Investors Chasing Outsized Gains

In the realm of international exchange-traded funds (ETFs), VNM ETF stands out with its significant market presence. As of June 13, 2024, the fund's portfolio size is nearly 523 million USD (~13,300 billion VND), reflecting its substantial influence in the market. This article delves into the recent activities of VNM ETF, including its latest additions, the impact on related stocks, and a comparative analysis of domestic and international markets.

Recent Portfolio Adjustments by VNM ETF

Additions to the Portfolio

VNM ETF recently updated its portfolio as part of its quarterly restructuring, adding two new stocks: Viettel Construction (CTR) and EVNFinance (EVF). The inclusion of these stocks increases the total number of stocks in the portfolio to 46.

• CTR (Viettel Construction): The fund is expected to purchase approximately 0.9 million shares, representing a 0.99% weight in the portfolio.
• EVF (EVNFinance): Around 8.5 million shares will be acquired, accounting for a 0.98% portfolio weight.

Increased Holdings

In addition to the new additions, VNM ETF plans to significantly increase its holdings in several stocks, particularly:

• Vinhomes (VHM): An estimated 6.3 million shares to be purchased.
• Vingroup (VIC): An anticipated acquisition of 1.2 million shares.

These adjustments reflect the fund's strategic move to bolster its exposure to prominent Vietnamese companies, particularly those under the Vingroup umbrella.

Comparative Analysis of Domestic and International Markets

Domestic Market

The Vietnamese stock market has been showing robust growth, with ETFs like VNM playing a pivotal role. The inclusion of CTR and EVF by VNM ETF is a testament to the increasing attractiveness of diversified sectors within Vietnam. The market is characterized by:

• Strong Growth Potential: Driven by economic expansion and favorable government policies.
• Sectoral Diversification: Increasing interest in sectors beyond traditional industries, such as construction and finance.

International Market

Comparatively, the international ETF market offers a broader spectrum but often exhibits slower growth due to market maturity. Key differences include:

• Market Maturity: Developed markets are more stable but offer lower growth potential.
• Regulatory Environment: Stringent regulations can both stabilize and limit market movements.
• Diversification Strategies: International ETFs tend to have a more diversified portfolio across various countries and sectors.

Frequently Asked Questions (FAQ)

1. What is VNM ETF?

Answer: VNM ETF is an exchange-traded fund focused on Vietnamese stocks. It is one of the largest foreign ETFs in the Vietnamese market, with a net asset value of nearly 523 million USD.

2. What recent changes has VNM ETF made to its portfolio?

Answer: VNM ETF has added Viettel Construction (CTR) and EVNFinance (EVF) to its portfolio and increased its holdings in Vinhomes (VHM) and Vingroup (VIC).

3. Why is VNM ETF important for the Vietnamese stock market?

Answer: As a significant investor, VNM ETF's activities can influence market dynamics, stock prices, and investor sentiment in Vietnam.

4. How do domestic and international markets compare?

Answer: The Vietnamese market offers higher growth potential and sectoral diversification, while international markets provide stability and broader diversification but with slower growth.