Stock Market Slump Has Knock-on Effect

The report, introduced for the first time by Woori CBV Securities Corporation in November last year, is a monthly evaluation of the performances of investment funds with Vietnamese holdings currently listed on international exchanges.

The report found fund ratings in December were essentially unchanged compared to the previous month, with more than 80 per cent of rated funds continuing to be ranked below average with negative final scores.

Among the 11 rated funds, the JF Vietnam Opportunities Fund, managed by JP Morgan Asset Management with assets under management of US$117.2 million, received the highest rating of five stars for the second time. Its NAV suffered a moderate loss of 4.48 per cent.

At the other end of the spectrum, the FTSE Vietnam Index Fund, with assets valued at about $222 million, received one star for the second month in a row for its performance. Its NAV also saw the biggest loss of 10.92 per cent.

In theory, during time of recession, balanced and conservative strategy tends to outperform the aggressive, but for the last month of 2011, balanced funds lost an average of 6.57 per cent while aggressive funds’ losses were just 4.38 per cent, the report states.

“However, the performance of each fund in a single month does not guarantee a better rating for that month. With our revised methodology, funds are accessed for longer term performance, along with other related factors focusing on risk and efficiency, rather than just the NAV figure,” the report said.

Since the regulation of open-ended funds was approved in Vietnam in December 2011, the rating system has been updated with a revised methodology which uses total returns based on NAV instead of market prices for rated funds.

By focusing on the NAV ratings, Woori CBV is also building new index products, called the Vietnam Mutual Fund Index family. The index family is calculated to reflect price movements of listed mutual funds both inside and outside Vietnam.

Funds are categorised into different groups based on incorporated locations (foreign, domestic, offshore), amount of assets under management (small, medium, large), investment style (aggressive, moderate, conservative) and sector. Funds specialised in debt have also been included in the index family for the first time.