While they may not have had the best year thanks to rising global inflation and a stronger dollar, emerging markets (EM) can still add a dose of growth as well as diversification to a portfolio heading into the new year. That said, investors may want to give Vietnam a closer look.
The macroeconomic environment wasn’t conducive to EM assets seeing strength for 2022 with the MSCI Emerging Markets Index down over 20% for the year. Despite this, certain countries like Vietnam have been relatively stable during the turmoil.
“In 2022, despite many difficulties, Vietnam has managed to keep the macro-economic stability, with high economic growth, controlled inflation and ensured major balances, as well as political stability and protected security and national sovereignty, and enhanced external relations, Prime Minister Pham Minh Chinh said at the 5th Vietnam Business Forum in Hanoi on December 17,” a reported.
One of the key indicators for strength in any EM country is support from the federal government. In the case of Vietnam, political views were aligned with all necessary parties, galvanizing not only the government but businesses and most importantly, the people.
“The success of Vietnam in the year was thanks to the sound leadership of the Party, the effective management of the State, and the engagement of the whole political system as well as the business community, all people and the support of international friends, the PM underscored,” the report added.
A Growth Opportunity in Vietnam
With the country staying relatively stable amid the broad EM weakness in a challenging 2022, this sets up a nice opportunity for exchange traded fund (ETF) investors to give the Global X MSCI Vietnam ETF (VNAM ) a closer look. The fund offers exposure to a spectrum of equities, ranging from large to small cap.
VNAM seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Vietnam IMI Select 25/50 Index. The index is designed to represent the performance of the broad Vietnam equity universe, while including a minimum number of constituents, as defined by MSCI, Inc.
With its 0.50% expense ratio, VNAM gives investors access to:
- Long-Term Growth Potential: Vietnam’s GDP grew at a rate exceeding 7% in both 2018 and 2019. Though interrupted by the pandemic, it is expected to resume annual rates of more than 6% growth in 2022-2025.
- Targeted Exposure: The Fund targets exposure to a single country.
- Efficient Access: Efficient access to a broad basket of Vietnamese securities.