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Open-ended fund gets down to business

Update: October, 10/2014 - 08:41

The Sustainable Competitive Advantage Fund allows the minimum purchase of VND2 million ($95) for its certificate since October 9.— VNS Photo

HA NOI (VNS) — SSI Asset Management's first open-ended fund, SSI Sustainable Competitive Advantage Fund (SSI-SCA) yesterday started its first trading day.

On Wednesday, the fund stopped receiving purchase orders with the minimum subscription amount of VND2 million (US$94.79).

SSI-SCA completed its fund certificate initial public offering on September 8 and raised nearly VND112 billion ($5.3 million), two times higher than the minimum charter capital of VND50 billion ($2.4 million).

The fund pursues long-term capital appreciation and regular return through investment in companies with sustainable competitive advantages and fixed income assets.

It focuses on listed companies which have competitive advantages, high market share, good corporate governance and healthy financial conditions. It will also invest in fixed incomes securities with high credit rating to preserve capital.

Under normal market conditions, the fund will invest up to 80 per cent of the fund's asset in equities, of which 20 per cent can be allocated in companies with lower market capitalisation and liquidity. However, they must meet the objectives of sustainable growth and potential development. The remaining 20 per cent will be invested in fixed income assets, cash or cash equivalents.

When market conditions are considered favorable, the fund may invest up to 100 per cent of its assets in equities.

Open-ended funds are available in most developed countries, but were launched recently in Viet Nam by asset-management companies. Investors can purchase and sell shares directly with the fund, which is the opposite to closed-end funds that typically issue all the shares at the outset.

Open-ended funds are expected to attract both domestic and foreign investors, particularly foreigners, as their investments in fund certificates are not restricted by foreign ownership, like their direct investments in listed companies. — VNS

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