More restructuring for fund management firms in 2020: SSC

HÀ NỘI – Fund management companies will be restructured more in 2020, according to vice chairman of the State Securities Commission Phạm Hồng Sơn.

Last year, fund management firms had stable performances and made good profits. The total value of assets under their management was more than VNĐ312 trillion (US$13.4 billion), up 20 per cent on-year and double the figure in 2016.

The State Securities Commission (SSC) last year licensed eight stock investment funds, four representative offices for foreign fund management firms, raising the total number of legible funds to 47.

In 2019, the total net asset value (NAV) of the fund management firms was VNĐ34 trillion, up 50 per cent during the year.

However, SSC warned only 10 of all 47 companies in Việt Nam were making profits and expanding their power on the market.

Those include VietFund Management (VFM), MB Capital, Techcom Capital and Vietcombank Fund Management (VCBF).

These companies have established at least three investment funds each and the funds are performing well.

At VFM, there are six different investment funds that target common stocks, blue-chip stocks and bonds.

Vietnam Securities Investment Fund (VFMVF1), Vietnam Blue-Chip Fund (VFMVF4) and Vietnam Bond Fund as of January 7 saw their NAVs increase between 0.19 per cent and 0.56 per cent.

At MB Capital, the MB Capital Value Fund (MBVF) posted a 25.82 per cent annual gain in its NAV as of December 31, 2019.

However, other fund management firms didn’t perform as well as expected such as AIC Fund Management (AFM), Lotus Capital and Viet Tin Capital.

Some companies are not managing any investment funds such as BIDV-Vietnam Partners.

Mixed conditions of the fund management sector has forced the SSC to suspend and dissolve four companies so far.

To continue restructuring, the SSC has tightened the licensing process for new companies and released new rules to make sure those companies and other financial firms operate properly and efficiently.

That would help Việt Nam meet international standards and practices, and keep the local equity market develop in a sustainable and secure manner, Sơn said.

According to analysts, the overall poor performance of the Vietnamese stock market is the main reason for mixed results of investment funds and fund management companies.

However, large-cap companies have more room for development than small ones due to the differences in the quality of information disclosure, transparency and financial capacity, making it difficult for small firms to compete in the Vietnamese equity market. – VNS