Options few for individual investors (18/04)
06/08/2010 - 26 Lượt xem
Nearly all the existing investment funds are for institutional investors, while VF1 is the only option for individuals.
According to the State Securities Commission (SSC), more than 90% of foreign indirect investment comes into Vietnam through foreign investment funds, several of which have been operating in Vietnam, while others are set up as foreign entities and do not have representative offices in Vietnam.
There are two kinds of investment funds, closed funds, like VF1 or VOF, and open funds. With the closed funds, investment certificates traders contact each other directly, while with the latter, fund management companies are charged with selling or buying certificates for investors on demand.
Dominic Scriven, Director of UK-based non-bank financial institution Dragon Capital said that Vietnam has become a magnet for investors. Five years ago, Vietnam had only two or three investment funds, which had total capital of $150mil. Now it has 10 funds with total mobilised capital of up to $700mil, not including new local funds.
Experts are now talking about the boom of the stock market with the prosperous performance of investment funds over the last two years. VinaLand, for example, could raise $320mil in funds, six times higher than expected. However, the fund management company finally decided to receive $200mil.
VEIL, the Vietnam Enterprise Investments Limited, managed by Dragon Capital has been operating in Vietnam for 10 years. In the first three months of operation, funds raised were mainly deposited at banks. The Asian financial crisis (VND lost value against the greenback) led to poor performance of the fund over the next three years. However, the funds operations have bounced back in the last two years with an average profit ratio of 9% per annum.
Chairman of the management board of VinaCapital Horst Geicke said that with the current market growth rate, the company will raise more capital after injecting all $200mil into the real estate market.
Among the existing funds, VF1 is the only fund for individual investors. VF1 certificates once dropped down to VND8,000 (VND2,000 lower than face value). However, the situation is better now with VF1 certificate climbing up to VND32,000. The fund management company is planning to raise VND200bil more by issuing more certificates.
Saigon A1 Securities Investment Fund (SFA1) is planning to issue fund certificates with face value of VND10,200 to raise funds from individual investors. The timetable for the certificate issuance has yet defined.
In its portfolio, SFA1 is planning to inject 50-60% of the capital to be raised in listed securities, aiming at the asset value growth rate of 30% in 2006.
However, Vo Van Tai, Chairman of the SFA1 management company remains cautious with his plans. “Individual investors prefer short term investment, so they may not want to buy fund certificates,” Mr Tai said.
However, investor Nguyen Van Phu said that the main reason why individual investors are less interested in investment funds is the high management fee (2.5% per annum on the total net asset value). The most important thing is that fund management companies show an attractive investment portfolio and an effective disbursement plan.
Meanwhile, an SSC official said on one hand that SSC does not limit licensing investment funds; on the other hand it advised the investors to think carefully before making an investment. He said that several funds have not yet disbursed all the funds raised over the last three years.