TCM Vietnam High Dividend Equity is a high dividend equity fund. At least half of the fund capital will be invested in listed shares on the exchanges of Ho Chi Minh City and Hanoi. At the most 20% of the fund can be invested in the Vietnamese OTC market. This depends on the liquidity of this market. The funds investment policy will be aimed at achieving capital growth as well as dividend pay outs. In principle, the fund will pay out dividend once a year with an expected dividend yield of approximately 4% per annum.
The risk profile is high, due to investments being channelled into frontier markets in Vietnam. The relationship between global financial markets and the Vietnamese markets is low, because the latter are less sensitive to international developments.
To achieve its objective, the Fund invests 95% to 100% of its total assets through TCM Investment Funds Luxembourg in units of TCM Vietnam High Dividend Equity (Lux). The Fund qualifies as feeder-structure.
TCM has entered into an agreement with Sustainalytics for the screening of the portfolios of the TCM equity funds on ESG criteria (UN Global Compact and Controversial Weapons).
The Fundmanger writes
The Ho Chi Minh Stock Index rose by 3% in October. The TCM Vietnam High Dividend fund showed a performance of 0.4%. October’s Ho Chi Minh Index performance was significantly impacted by shares of Masan Group (MSN), which surged 54% on speculations of restructuring that would positively impact profits. Vingroup (VIC), another heavyweight, rose by 16% due to an expected increase of weight within the MSCI Frontier Markets ETF. The two stocks were responsible for almost the complete gain of the index this month. Lack of dividend and overstretched valuations were the main reasons for excluding these stocks in our portfolio, which was the main reason for the underperformance this month.
During the last weeks Vietnam was being hit by a series of severe tropical storms. The latest typhoon, Molave, is the fourth tropical storm to batter the country since 11 October and the ninth since the start of the year. Though the storms caused some serious damage, it is likely that the government will support the affected areas. The impact of the storms on the country’s economic (Covid-19) recovery process will be limited. Vietnam continues to do a great job as they reported 58 days without any community transmitted cases. Commercial flights to Japan and to Korea have resumed.
So far during the year the Vietnamese stock markets experienced a net foreign outflow of money. It is expected that the new weighting of Vietnam in the MSCI Frontier Markets benchmark (currently estimated at 28%), will turn this around. Repositioning of index investors will probably lead to net buying during the remainder of the year. Some of our large cap positions like VNM and HPG should profit from that. Macro numbers remained strong this month: the Purchasing Managers Index (PMI) posted 51.8 in October, down slightly from 52.2 in September but signaling a further improvement in the health of the manufacturing sector. Vietnam’s imports rose by +10.1% y/y, reaching $21.1bn. This figure is interpreted as a sign of recovery of new orders, which in turn predicts an increasing global demand in the coming months. Exports also rose strongly to $26.7bn, +9.9% y/y. The trade surplus grew to $18.7 billion during the first 10 months. We remain very positive on the outlook of our Vietnam portfolio. The introduction of a vaccine by the end of this year, could especially put a revaluation/rotation in motion for a large part of our value oriented portfolio.
No rights may be derived from this publication. You are referred to the prospectus and Key Investor Information Document for the fund's terms and conditions. These documents may be obtained from the website or the address mentioned below. The manager of the fund has obtained a licence for this fund from the Netherlands Authority for the Financial Markets in accordance with the provisions of the Financial Supervision.