VietNamNet Bridge – Only a few of the 50 existing investment fund management
companies has been performing well, while others cannot raise funds to manage.
The representative of the SSI investment fund management company admitted at the
meeting with the State Securities Commission in early 2013 that the fund
management companies experienced a very tough year in 2012, when no new fund was
A lot of management companies still didn’t have funds to manage. Most of the
companies incurred big losses or made modest profits. Many of them have been
operating at a moderate level to survive the difficulties and wait for the stock
market to prosper again.
The question what fund management companies have been doing to live if they
cannot call for capital from investors remains unanswered. Investors can find
the finance reports of fund management companies on the official website of the
State Securities Commission. However, these are just annual reports, while fund
management companies are not public companies, which are not required to submit
reports regularly for investors to update information.
In principle, there are many things the companies can do in case they don’t have
funds to manage. They can act as the brokers to connect some transactions on the
OTC (over the counter) market and on the bourses, make investment as authorized,
or making investment with their own money.
However, analysts say the activities should not be the “jobs” of the fund
management companies, which were established to manage securities investment
Tran Thanh Tan, General Director of VFM Company, Chair of the Vietnam Fund
Management Companies’ Club, has noted that a “filtration process” has been
occurring with fund management companies. Some companies have been found as
unable to meet the requirements on the finance safety ratios, while the number
of the companies with minus growth rate has been on the rise.
Also according to Tan, the existing fund management companies can be divided
into two groups. The first one includes 33 profitable companies, of which 25
belong to commercial banks, insurance companies, or securities companies. The
companies have been managing 83.4 percent of the total assets.
Meanwhile, the second includes 14 small companies which have been incurring big
A report from State Securities Commission (SSC) showed that of the unprofitable
companies, three cannot meet the requirements on finance safety ratio, which may
be put under the special control by the watchdog agency.
To date, 15 companies have been managing 22 investment funds, of which 6 funds
are following the procedure for closing, and 4 have decreased their chartered
SSC and the Ministry of Finance’s inspectors have organized a workshop to
consult with experts about the procedure for inspecting fund management
companies. The move shows the determination of the watchdog agencies to
restructure the stock market and heighten the state management over the market’s
The watchdog agency is compiling the regulation guiding the establishment and
operation of the risk management system for fund management companies. The
regulation says that not only securities companies, investment funds and fund
management companies also have to set up effective risk management systems.
Especially, it says the fund management companies have to build up the risk
management strategies for every investment fund and client, and the strategies
must be reviewed once at least every year.
According to SSC, there are 47 fund management companies with the total
chartered capital of VND3.126 trillion, which manage the total assets of VND98
trillion. The turnover of the companies was VND700 billion in 2012, and the
profit was VND30 billion.
Compiled by Thu Uyen