Vietnam ETF tries to break out
The Vietnam focused exchange traded fund Market Vectors Vietnam (NYSEArca:VNM) managed to beak above its 200 day-moving-average. Can the country’s fundamentals maintain this level?
“There has been so much negativity with regard to emerging Asian equities over the last 12-18 months. Some of it has been attributable to concerns of a ‘hard economic landing’ in China, while some of it has been due to fears regarding Europe’s recession and debt crisis,” Gary Gordon said on Seeking Alpha.
![](http://static1.vietstock.vn/indochinastock/images/VNM-Viet-nam.png)
Of the emerging Asian ETFs, there have been three that have outperformed the S&P 500. VNM is still in a downtrend, however, the fund has posted the strongest percentage gains of the Emerging Asia ETFs.
SDPR S&P 500 (NYSEArca: SPY) has managed to gain 9.7% in 2012, compared to VNM which is up 21.3%. Compare this to the iShares MSCI Malaysia (NYSEArca: EWM) which has gained 7.5% in 2012 and the iShares MSCI China ETF (NYSEArca: MCHI) that is up 1.3% through July 30th and the SPDR S&P China (NYSEArca: GXC), up 1.1% through July 30.
In comparison to other frontier economies, Vietnam has managed to show resilience. Inflationary pressure that was seen earlier in the year, at 25%, was the country’s major challenge, and the governments’ efforts to quell the inflation has begun to make a positive mark on the economy.
Sean Geary for Emerging Money reports that in the second quarter, the Vietnamese economy grew 4.7% year-over-year. Further interest rate cuts and the governments policies to help grow the economy should help boost companies production and sales.
Much of the future well-being of the frontier economies will be dependent upon the outcome of the Eurozone debt troubles and the ability of major developed economies to maintain and post GDP growth.
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