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Fund to increase portfolio cash ratio
The Viet Nam Securities Investment Fund (HoSE: VFMVF1) planned to increase the proportion of its portfolio held in cash from 5-6 per cent to 10-15 per cent, as well as change the fund type from a closed-end fund to a wholly or partially open-ended fund, VF1 announced during its annual investors meeting this week.
To achieve the new ratio, the fund would sell some of its stock portfolio, placing it in a better cash position to exploit newly-arising opportunities in initial public offerings or the equitisation of state-owned enterprises such as Vietnam Airlines or MobiFone, as well as acquire shares issued by private companies with strong potential.
VF1 General Director Tran Thanh Tan said Viet Nam's stock market in 2011 continued to hold a positive outlook and the fund's investment strategy continued to be value-oriented.
Strong Governement measures this year to regulate the economy and the low price-to-earnings ratios of many shares would help attract foreign investment back to the market, he added.
"With 85 per cent of our portfolio held in stocks, when the market recovers, our portfolio will grow," Tan said.
Investment would continue to focus in such key areas as retail, telecommunications, real estate, energy, industry and mining, he added.
VF1 was also preparing the necessary documents to change its fund type to an open-ended fund once the Government decree allowing operations of open-ended funds takes effect in July.
At the end of 2010, VF1's net asset value (NAV) reached VND2.27 trillion (US$108.3 million), down 8.2 per cent from the beginning of the year, with the fund incurred a loss for the year of VND203.6 billion ($9.7 million). Fund disbursements declined 13 per cent from 2009 to about VND1.24 trillion ($59 million).
Cash and other assets accounted for 7.1 per cent of total NAV as of last December 31.
Last year, VF1 reduced the proportion of unlisted shares in its portfolio from 17.8 per cent to 16.8 per cent of total NAV due to the prolonged stagnation of the over-the-counter market, increasing the proportion of listed shares to 76.1 per cent.
VF1 is currently listed on the HCM City Stock Exchange under the code of VFMVF1. It closed unchanged yesterday to VND10,700 (US$0.51).
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