HA NOI (VNS)— The investors of the Viet Nam Securities Investment Fund (VFMVF1) decided to convert from a closed-end fund to an open-end fund at an extraordinary investors' meeting yesterday.
VFMVF1, which was the first closed-end public fund, will have its final trading day on the HCM City exchange on September 24 and re-start operations as an open-end fund on November 7 this year.
Transactions will be carried out two times a month.
The net asset value (NAV) of the fund ending March reached over VND1.734 trillion (US$82.6 million) with first-quarter profit of VND214.5 billion ($10.2 million).
As of June 20, investments in listed stocks made up 67 per cent of the portfolio, with 64 per cent focusing on large-cap stocks. Cash occupied 31 per cent of the fund's assets.
The fund will continue its balanced investment strategy, allocating 80 per cent of assets to stocks and this proportion can increase to 90 per cent in case of an optimistic market outlook. Another 20 per cent will be assigned to Government and corporate bonds and cash.
According to the fund, foreign ownership in an open-end fund will not be capped at 49 per cent. This means that through capital contribution, foreign investors can increase their holdings in major companies in which the room for foreign investment has been almost exhausted.
"Converting the fund is a good option to satisfy the diverse investment demand of investors," the fund's representative said.
Taxation imposed on fund share transactions is no different between the two types of funds.
Open-end funds are popular schemed around the world, but were only introduced to Viet Nam in March last year.
An open-end fund is deemed to offer a more flexible investment option as investors can buy and sell shares directly from the fund itself.
It contrasts with a closed-end fund which typically issues all the shares at the outset, with such shares being tradable between investors thereafter. — VNS