HCM CITY — The Viet Nam Securities Investment Fund (VF1), managed by VietFund Management Joint Stock Co (VFM), will pay out at least 50 per cent of any net profits this year, the fund's stakeholders agreed in their annual meeting yesterday in HCM City.
VFM general director Tran Thanh Tan reported VF1 had a net loss in 2011 of nearly VND828 billion (US$39.4 million). The fund's net asset value (NAV) by the end of last year was about VND1.3 trillion ($61.9 million), equivalent to VND12,983 per fund certificate and down nearly 40 per cent from the start of the year. Due to hardships on the stock market, the fund certificates (VFMVF1) were also being traded at a discount averaging about 45 per cent.
"In nearly three months of this year, with the market rallying, VF1 has regained nearly 20 per cent of its NAV lost last year," he noted.
Tan said that this year the fund would focus on stabilising and increasing its NAV and increasing the liquidity of its investment portfolio. In addition to investing in large-cap shares, VF1 would continue to prioritise a value-oriented investment strategy, investing in companies with good fundamentals, strong cash flows and transparent operations. Meanwhile, it would also continue to adjust its portfolio to balance profit and risk.
Last year, fund assets were allocated towards increasing the proportion of cash, reducing the proportion of unlisted shares and maintaining a reasonable proportion of listed shares. VF1 reduced the proportion of unlisted shares in its portfolio from 16.8 per cent to 10.6 per cent, while increasing the cash ratio from 7.1 per cent at the beginning of the year to 17 per cent by year end.
"Although many forecasts say the market will continue with difficulty this year, positive moves by State agencies in stabilising the economy and restructuring the stock market have opened up new opportunities for investors– especially the circular allowing operation of open-end funds starting in March," Tan said.
VF1 will end its present form of operation in May 2014, he noted, at which time the fund would either convert to an open-end fund or completely terminate its operations. Though no decision has been reached, Tan said, assets would be liquified in prices which were advantageous at that time. — VNS