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ETF Basic

What is an ETF? List of top ETF in Vietnam.

In Vietnam’s stock market, Exchange-Traded Funds (ETFs) are best choice for many successful investors. ETFs provide a straightforward and efficient way for investors to manage their portfolios without dealing with complicated details. Discover the benefits of ETFs with KIS Prime, making it easier and more effective to diversify and simplify your investment portfolio.

What is ETF Why Invest in ETF
What is ETF?

ETFs -New Era of Investing Arriving” 

As of January 2024, the Vietnam’s stock market has a total of 19 active ETFs. The estimated total value of investment portfolios is around 3.3 billion USD. It is expected that both the number and scale of these ETFs will continue to increase significantly in 2024. This reflects the growing interest and confidence of investors in this investment model, given the developing financial market in Vietnam that is attracting attention from investors (according to CafeF news).

1. What is an Exchange-Traded Fund?

  • An Exchange-Traded Fund (ETF) is a type of investment fund, representing a basket of securities that generally aims to track the performance of a specific index. ETFs are traded on stock exchanges, providing investors with the opportunity to buy and sell shares throughout the trading day at market prices.
  • Key benefits of investing in ETF include:
  • Diversification
 ETFs typically hold a diversified portfolio of assets, which helps spread risk across different securities.
  • Liquidity
 ETFs trade on stock exchanges like individual stocks, providing investors with liquidity as they can be bought or sold at prevailing market prices during trading hours.
  • Transparency
 The holdings of an ETF are usually disclosed daily, allowing investors to know the assets within the fund.
  • Low Costs
 ETFs often have lower expense ratios compared to traditional mutual funds, making them cost-effective investment options.
  • Flexibility
 Investors can use ETFs to gain exposure to various shares, sectors,etc allowing for flexibility in building an investment portfolio.

Overall, ETFs have become popular investment vehicles due to their convenience, diversification benefits, and cost-effectiveness. They offer investors an efficient way to gain exposure to a broad range of assets or specific market segments.

  • The Development of ETFs

The concept of exchange-traded funds (ETFs) originated in the 1990s in the United States and Canada. ETFs swiftly attracted the attention and interest of various investor demographics. This investment model is not merely a financial instrument but also serves as a user-friendly gateway for investors to participate in the financial market. The development of ETFs is not confined to the boundaries of Latin America, it has evolved into a promising product that connects investors globally, catering to both novices and seasoned players in stock markets around the world..

>>> Learn more about the Evolution of ETFs

  • The Pros & Cons of ETFs:

Advantages of Investing ETF:

  1. ETFs often have lower transaction and management fees, helping investors save on costs.
  2. ETFs can be bought and sold like regular stocks on the stock market, providing investors with flexibility to execute transactions during market hours. ETFs help save on tax costs. The price of ETFs usually closely tracks the underlying asset value, ensuring transparency and stability in the market.
  3. ETFs often track a specific index or a certain group of assets, aiding investors in diversifying their portfolios and reducing investment risk.

Cons of Investing ETF:

  1. Diversification may not be robust enough, particularly with funds tracking specific sectors like financial stocks, potentially leading to decreased performance when that sector faces a market downturn.
  2. Liquidity may not be high, making it difficult to quickly buy or sell funds.

  • Common Types of ETFs in the Current Market

Types of ETFs (Exchange-traded funds)

 2. List of ETFs in Vietnam 2024 

STT  Quỹ hoán đổi danh mục ETF iNAV % Change %Index Reference
FUEVFVND 25,955 1,803.5 0.23%
E1VFVN30 19,519 1,131.46 0.26%
FUEDCMID 10,710 1,729.44 0.43%
FUEVN100 15,279 1,141.65 0.31%
FUEKIV30 7,456 1,131.46 0.26%
FUESSVFL 18,340 1,816.47 0.68%
FUESSV30 13,961 1,131.46 0.26%
FUEMAV30 13,411 1,131.46 0.26%
FUEKIVFS 10,533 1,851.79 0.68%
FUEMAVND 10,859 1,803.5 0.23%

3. Investing in ETFs in Vietnam

  • Vietnam ETFs are typically listed on the stock exchange, allowing investors to purchase ETFs through Vietnamese securities companies.
  • Buying ETF shares is similar to purchasing stocks and can be done by following these basic steps:
Steps to buy ETF for beginners

Step 1: Learn about ETFs that align with your investment needs

Step 2: Open a Securities Account: Create an account with reputable securities companies in Vietnam that suit your requirements.

Step 3: Start to order ETF :

  • Choose the type of ETF you want to invest in.
  • Execute the ETF purchase order through the securities company where you have created an account. Select the order type (market or limit), enter the quantity to purchase, and confirm the order information.
Considerations when choosing a securities company:
  1. Transaction Fees: Opt for a securities company with competitive and transparent transaction fees to minimize costs associated with buying and selling ETFs.
  2. Policies and Promotions: Explore any special promotions or favourable policies securities firms offer, such as commission-free transactions or other incentives.
  3. Reputation and Experience: Choose a company with a good reputation and extensive experience in handling ETFs in the stock market. This can contribute to smoother transactions and better overall service.
  4. Customer Service: Assess the quality of customer service provided by the securities company. Responsive and helpful customer support can be crucial, especially for new investors.
  5. App Trading Platform: Consider the functionality and user-friendliness of the online trading platform provided by the securities company. An efficient platform can make it easier to monitor and manage your ETF investments.

Mở tài khoản giao dịch ETF trực tuyến với EKYC KIS 2024
Mở tài khoản giao dịch ETF trực tuyến với EKYC KIS 2024, ưu đãi 0% phí giao dịch.

Step 4: Confirm Transaction Results and Monitor. 

ETFs are not just investment products but also opportunities for those seeking a smart and efficient entry into the stock market. The information provided by KIS Vietnam ETF helps individuals gain a clearer understanding of what ETFs entail, enabling them to make well-informed investment decisions. Best of luck on your investment journey!