Published On: Fri, Jul 18th, 2014

Initial Public Offering For Vietnam’s First ETF

Hanh Luong Thi My, CIO, Vietfund Management -

Hanh Luong Thi My, CIO, Vietfund Management –

VietFund Management (VFM) has officially announced the press conference for the initial public offering of the for VFMVN30 ETF – the country’s first Exchange-Traded Fund.

VFMVN30 ETF has received license No. 52/GCN-UBCK, dated July 4th 2014 by the State Securities Commission. The Fund will be managed by VietFund Management (VFM) and the Fund’s Authorized Participants (APs) – Ho Chi Minh Securities Corporation (HSC) and Bao Viet Securities Company (BVSC). The Fund’s custodian bank is Standard Chartered Vietnam Bank (SCB). The IPO period is from July 21 to Aug 14th, 2014.

The objective of the VFMVN30 ETF is to replicate the performance of VN30 Index after providing for the Fund’s operating expenses. The VN30 Index, which the Fund will follow, is a price index established and managed by the HCMC Stock Exchange.

VFMVN30 ETF will implement a passive investing strategy to carry out its pre-set investment objectives. When the basket of component securities of the VN30 Index changes, the VFMVN30 ETF will adjust its portfolio to align with the VN30 constituency. The Fund will seek only to replicate the Index and will not conduct active strategies regardless of market movements.

The VN30 Index consists of 30 HOSE-listed stocks screened for free float, market capitalization and trading value. At least 95% of the fund’s assets will be invested in listed companies belonging to the constituency of the VN30.

In addition to providing local investors with an index-based vehicle to expose to the attractive equity market, VFMVN30 ETF is aimed at offering foreign investors with higher tracking efficiency and an alternative to investing in listed stocks at full foreign ownership limits, two critical features that two foreign Vietnam-focused ETFs have not offered. No foreign ownership limit reflects its special regulatory status as a locally-listed ETF, run by a locally-licensed, locally-domiciled fund manager. At the present time it is an entirely unique vehicle.

After the IPO period, the VFMVN30 ETF will be listed on the HCM Stock Exchange. VFMVN30 ETF can be traded in both the primary market by exchanging the component securities to get ETF creation units, and in the secondary markets through Ho Chi Minh Stock Exchange. During the trading hours in HSX, the Fund’s indicative net asset value (iNAV) and iVN30 will be calculated and public for investor information. The Fund’s NAV will be announced daily together with the component securities portfolio 30 minutes prior to the start of every trading session.

Standard Chartered Vietnam Bank is to provide custodian, supervisory and fund administration services for the VFMVN30 ETF. The Vietnam Securities Depository (VSD) will act as the Fund’s transfer agent.

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