ETF Basic

Fund Management Company (FMC) plays a crucial role in developing Vietnam’s securities market and investment funds. Let’s explore the roles and activities of these companies with KIS Vietnam and get to know the top fund manager in Vietnam for 2024.

1. What is a Fund Management Company (FMC)?

• A Fund Management Company is a specialized organization responsible for managing, developing, and operating investment funds, which can include mutual funds, retirement funds, or Exchange-Traded Fund (ETF) certificates. The fund management company collects capital from investors through the issuance of fund units and then invests in various assets such as stocks, bonds, and other financial instruments.
• FMCs play a crucial role in shaping and maintaining the performance of investment funds, concurrently taking responsibility for risk management and optimizing returns for investors.

• Roles of Fund Managers: 

  1. Building Investment Strategy:

  • Fund Managers are responsible for constructing the investment strategy of ETFs, including setting profit targets, determining asset allocation ratios, and establishing specific investment rules. This strategy is typically formulated based on research and insights into the financial market and economic conditions in Vietnam.

  2. Developing Funds and Managing Investment Portfolios :

  • Fund Managers engage in collaborative efforts with financial partners, including securities companies, banks, and authorized participants to develop new ETFs. They are responsible for selecting suitable assets for investment, aligning with the fund’s objectives and investment strategy. After ETF units are created, Fund Managers make transaction decisions to optimize returns from the investment portfolio..

  3. Optimizing Returns and Risk Management:

  • Fund Managers evaluate and manage risks to ensure the stability of the fund. Flexibility in adjusting the strategy helps maintain accurate responses to market trends, minimize risks, and optimize returns. The financial market is constantly evolving, and Fund Managers play a crucial role in adjusting the strategy to cope with market dynamics. Fund Managers not only manage investment portfolios but also make critical decisions for the development of ETFs in Vietnam.

2. Activities of Fund Management Companies (FMCs) in Vietnam

• Following the draft Circular of the Ministry of Finance guiding the operations of securities investment fund management companies (16/09/2020), FMCs play a crucial role in ensuring transparency, compliance, and optimal performance. The key activities and responsibilities include:
• 1. Roles and Responsibilities: FMCs are designated as authorized representatives of entrusted investors, responsible for executing ownership rights over assets with honesty and diligence. Signing custody agreements with custodian banks is essential to ensure transparency and compliance with regulations.
• 2. Establishment and Management of Investment Funds: FMCs actively engage in raising capital from investors through the issuance of fund units. Collaborating with financial partners, such as securities firms, banks, and Authorized Participants (AP), FMCs undertake the development and launch of new investment funds. FMCs take the responsibility of selecting and managing investment portfolios within funds, continually monitoring and adjusting these portfolios to achieve optimal performance aligned with fund objectives.
• 3. Research and Advisory: Conduct market research to evaluate investment opportunities. Provide detailed information and in-depth analysis to support clients in achieving their investment goals effectively and safely.
• 4. Monitoring and Safeguarding Interests: FMC activities are supervised by authorities and the State Securities Commission. Banks safeguard and monitor fund assets, ensuring compliance with government regulations and ethical asset management principles.

All these activities are aimed at ensuring professional, secure fund management, delivering returns to investors, and adhering to government regulations and principles in asset management.

3. List of top fund management companies in Vietnam

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1. Dragon Capital Vietfund Management (DCVFM) DCVFM is a prestigious and long-standing fund management unit in Vietnam, operating in the market since 1994, with total invested assets reaching nearly 4 billion USD (as of January 2024). DCVFM’s fund products available in the Vietnamese market include: DC Dynamic Stock Investment Fund – DCDS, DC Top Business Investment Fund – DCBC, DC Bond Investment Fund – DCBF, Vietnam Stock Investment Fund – VFMVSF, DC Increased Fixed Income Bond Investment Fund – DCIP, Retirement Fund, and more. DCVFM’s ETFs: VFMVN30 ETF (Stock code: E1VFVN30): Tracks the VFMVN30 index, comprising 30 large-cap stocks with significant influence on the Vietnamese stock market. VFMVN DIAMOND ETF (Stock code: FUEVFVND): Focuses on Diamond stocks with large market capitalization, having a Foreign Ownership Limit (FOL) of 95%, making it a favourite among foreign investors in the Vietnamese market. DCVFMVNMIDCAP ETF (Stock code: FUEDCMID): Mimics the performance of the VN MidCap Index as closely as possible. Invests in mid-cap stocks in the market, helping investors diversify their investment portfolios. >>> Learn more: the top ETFs of DCVFM

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2. VinaCapital Fund Management Company VinaCapital established in 2012, as one of the leading fund management companies in Vietnam, specializing in investment fund management and financial consulting. With total assets exceeding 4.0 billion USD (as of January 2024). Some notable funds managed by VinaCapital include Forum One Fund, VCG Partners Vietnam, Vietnam Equity Special Access Fund (VESAF), and two open-ended funds catering to domestic investors. VinaCapital offers a diverse range of investment funds to meet the varied needs of investors, such as VINACAPITAL-VESAF, VINACAPITAL-VEOF, VINACAPITAL-VMEEF, VINACAPITAL-VIBF, VINACAPITAL-VFF, VINACAPITAL-VLBF, and more.  VinaCapital VN100 ETF (FUEVN100) is listed on the HOSE stock exchange, and tracks the VN100 index, comprising 100 large-cap stocks that significantly influence the Vietnamese stock market. These offerings provide diverse choices to meet investors’ various investment goals and strategies.

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3. SSI Asset Management SSIAM (SSI Asset Management) is a fund management company based in Vietnam, established in 2007. As of October 2023, it manages assets totalling over 14,651 billion dongs (601.438 million USD). SSIAM offers a diverse range of fund certificates and member funds, including SSI-SCA, SSIBF, VLGF, DAIWA-SSIAM II, and more. In addition, SSIAM manages ETFs such as SSIAM VNX50, SSIAM VN30, and SSIAM VNFIN LEAD. The company provides flexible and diverse investment solutions for investors, assisting them in achieving their financial objectives through high-quality fund products.

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4. Công Ty Mirae Asset Việt Nam Mirae Asset Finance Company (Vietnam) operates as a distinguished financial entity under the Mirae Asset Financial Group, establishing its presence in Vietnam in 2011. Specializing in funds and financial services, the company boasts total assets exceeding 213 billion dong, as of January 2024. Here is an overview of the funds managed by Mirae Asset Vietnam: Open-end Equity Funds: MAGEF Fund, MAFF Fund ETF:  MAFM VN30 ETF Fund, MAFM VNDIAMOND ETF Fund. >>>  Lean more about ETF MAFM VN30

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6. Vietcombank Fund Management Company (VCBF) Established in 2005, Vietcombank Fund Management Company is a leading entity in managing open-end funds in Vietnam. With total assets under management reaching 186.6 million USD as of October 2023, VCBF offers a diverse range of funds, including Balanced Strategic Investment, Leading Stock, Growth Stock, and Bond Funds. However, it is essential to note that, as of now, VCBF has not ventured into providing ETF fund services. While ETFs are not currently part of their offerings, VCBF remains a reliable choice for investors seeking open-end fund options in the Vietnamese financial market.

Xem thêm: Exploring ETF Investment – Golden Opportunities for Investors in 2024
KIS Vietnam hope that investors have gained a deeper understanding of investment fund products and services, as well as the significant role played by fund management companies in the Vietnamese investment market through this article. Be confident and insightful when making your investment decisions, and we wish you success on your financial journey!

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