In this Dragon Capital Vietnam Equity Fund review, we will examine the investment opportunity’s terms and performance, and whether it could fit into your portfolio.
Dragon Capital Vietnam Equity Fund is an open-ended UCITS product being offered by Dragon Capital Group. The DC Developing Markets Strategies plc sub-fund is also dubbed Vietnam Equity (UCITS) Fund.
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Let’s begin our review of Dragon Capital Vietnam Equity Fund by knowing some details about the investment provider.
Dragon Capital Group Background
Integrated investment platform Dragon Capital Group rolled out in 1994, with a focus on Vietnam and other developing Southeast Asian economies.
In order to achieve medium- to long-term capital appreciation through investments in a variety of firms, Dragon Capital provides clients with comprehensive exposure to Vietnam’s public equities markets.
With a commitment to ethical investing, Dragon Capital Group addresses environmental, social, and governance concerns strategically and over an extended period of time, understanding that these issues may have an effect on portfolio performance and investment risk.
The Group has amassed a storied history and emerged as a major force in the Vietnamese financial markets, managing assets worth $5 billion on December 31, 2022.
Dragon Capital Group is Vietnam’s oldest independent fund manager. It offers different investment opportunities and products in the country.
Dragon Capital Vietnam Equity Fund’s investment strategy is quantitative.
Dragon Capital Vietnam Equity Fund Features, Terms
The Fund is legally marketed and sold in the following locations:
- Belgium
- Finland
- France
- Germany
- Greece
- Italy
- Luxembourg
- Norway
- Singapore
- Spain
- Sweden
- Switzerland
- and the UK
The class A shares of the fund was launched on September 30, 2013, followed by B Shares five years later in July 2018. On January 15, 2024, C shares were rolled out as well. A shares’ performance measures are determined in US dollars, B shares in Euros, and C shares in British pounds.
Vietnam Equity Fund Allocation
Within the Vietnam Equity Fund, the top three holdings include MB Bank, the IT firm FPT Corporation, and Vietcombank. The fund’s portfolio is predominantly allocated to the banking sector, constituting 42.6% of holdings, followed by consumer discretionary at 14.0%.
Vietnam Equity Fund Minimum Investment
The Dragon Capital Vietnam Equity Fund requires a minimum commitment of $25 million from institutional investors. On the other hand, a minimum investment requirement of EUR or GBP 1 million applies to retail investors.
Vietnam Equity Fund Performance
Dragon Capital Vietnam Equity Fund has demonstrated an annualized return of 11.56%, with the lowest return or loss of -29.35% and highest return of 21.78%. The portfolio turnover rate, as defined by UCITS regulations, was 52.33% for one year to June 30, 2022.
VEF A Shares
The one-year performance is reported at 29.14%, while the five-year performance hit 36.43%. Additionally, since the inception of the shares, the cumulative performance has reached 212.45%, as at Feb. 29, 2024.
VEF B Shares
The performance over a period of one year stood at 26.97%, five years at 46.42%, and cumulatively since inception at 66.00%.
Meanwhile, not enough data is available to gauge the performance of C share class.
Dragon Capital Vietnam Equity Fund fees
Investors in A shares are liable to recurring fees of 2.3% each year in addition to a one-time 5% admission charge without an exit fee. Notably, A shares are not subject to a performance fee. Comparably, B shares and C shares are subject to the same fees as A shares, which include no exit and entry charges. But the recurring fees for B and C shares are less—they are 1.8% and 1.7% annually, respectively.
Pros and cons of Dragon Capital Vietnam Equity Fund
Vietnam Equity Fund Benefits
- Investor protection and transparency are ensured by the European Union’s stringent regulations, which Vietnam Equity (UCITS) Fund complies with.
- Because it is a UCITS fund, ordinary investors throughout the EU can invest in it, so it’s more accessible vs funds that are only available to institutional investors.
- Investors may profit from Vietnam economy’s growth prospects, thanks to VEF exposure to the country’s equities market.
Vietnam Equity Fund Risks
- The fund can have issues with liquidity.
- Purchasing Vietnamese stocks exposes investors to the volatility, political woes, and changes in regulations that are typical of developing markets.
- The fund’s operations may be impacted by modifications to UCITS regulations.
- The returns of the fund may be impacted by shifts in the value of the Vietnamese dong relative to other major currencies, particularly for investors whose primary currency is different from the reporting currency of the fund.
- Historical performance can offer valuable perspectives, but moving along there is no assurance that the fund will yield comparable results.
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