The strong upward momentum seen in the Vietnamese stock market at the beginning of summer has slowed down a bit. Globally, the uncertainty of investment markets and the economy has also increased. That’s why, instead of the usual portfolio manager’s monthly market commentary, we wanted to remind you of a few fundamentals, why we feel confident with our investments in Vietnam and why we find investing in Vietnam attractive.
- Vietnam is one of the fastest-growing economies in Asia. In 2022, its GDP grew by 8 percent. We believe that the country will reach a growth rate of over 5 percent in 2023, as the growth accelerates in the latter part of the year.
- Our outlook is that Vietnam’s economic growth will continue in the next few years at an annual rate of 5 to 7 percent. We expect the annual earnings growth of listed companies to remain between 12 and 25 percent.
- There are multiple solid economic drivers backing Vietnam’s growth story: Fast growing middle class among nearly 100 million Vietnamese, accelerating urbanization, competitive education, efficient industrial production, active and independent trade policies, stable and long-term focused economic policy and healthy public finance.
- Vietnam’s economy is progressing from simple products to more complex products and services, with investments in areas such as software development training. Vietnam currently ranks among the top 5 countries in the world with over 500,000 IT engineers, and an additional 50,000 IT engineers graduate annually.
- The United States is Vietnam’s largest export partner. In September, Vietnam made the USA one of its most important strategic partners after President Joe Biden visited Hanoi. Vietnam is the only country in Southeast Asia that has been visited by all five of the last US presidents.
- The Inflation in Vietnam is under control – in August at 2.9%.
- Vietnamese market is attractively priced: The VN-Index trades at P/E 12.3 against 2023 earnings. With the expected earnings growth for 2024, the P/E ratio is to drop below 10.
- PYN Elite’s current VN-Index target is 2,500, based on a fair target P/E of 16. This could be achieved during the years 2025-2026. Now the index is at 1 200 points.
Our fund takes a long-term approach to investing and we have a track record of almost 25 years. The average annual return is about 17% (CAGR), the ten-year return is 147% and YTD right now is about 9 percent.
Please note that we regularly update the fund’s presentation page, where you can find more information on Vietnam and the largest positions in our investment portfolio.
The next subscription day is on the 29th of September.
PS. Our portfolio manager’s investor letter is currently in progress and will be published in October.
Important information regarding the text and the Fund
The attached publication is marketing material and should not be regarded as a recommendation to subscribe or redeem units of the PYN Elite Fund. Before subscribing please familiarize yourself with the Key Information Document, the Prospectus and the Rules of the Fund. The material presented in this text is based on PYN Fund Management’s view of markets and investment opportunities. PYN Elite Fund (non-UCITS) invests its assets in a highly allocated manner in frontier markets and in a small number of companies. This investment approach involves a larger risk of volatility compared to ordinary broadly diversified equity investments. The value of an investment may decline substantially in unfavorable market conditions or due to an individual unsuccessful investment. It is entirely possible that the estimates of economic development or a company’s business performance presented in this presentation will not be realized as presented and they involve material uncertainties.