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Korea Investment launches first Vietnam leverage ETF

Korea Investment Management ETF strategy team manager Jeong Seong-in (up right) and KIM Vietnam Fund Management head of equity investment department Bae Seung-kwon (down) speak at an online press briefing on Thursday. (KIM)
Korea Investment Management ETF strategy team manager Jeong Seong-in (up right) and KIM Vietnam Fund Management head of equity investment department Bae Seung-kwon (down) speak at an online press briefing on Thursday. (KIM)
Korea Investment Management, a fund operating under Korea Investment Holdings, has launched its first Vietnam leverage exchange-traded fund on South Korea’s main bourse, the Kospi, on expectations of a rally in Vietnamese stocks, the company said Thursday.

The KINDEX Vietnam VN30 Futures Leverage (H) ETF tracks VN30 Futures. Launched in 2017, VN30 Futures are the Southeast Asian country’s first tradable stock index futures.

It uses the Bloomberg VN30 Futures index to provide investors access to the country’s derivatives market without foreign investor limitations, the officials said via a YouTube press conference.

While the ETF made its market debut a day earlier, the US dollar hedged structure mitigates investors’ exposure to Vietnamese currency fluctuations. It also targets double the profit in the Vietnamese derivatives market in line with the high growth potential of the country’s economy, they added.

“Compared to other nations, Vietnam is far less affected by the COVID-19 as the number of confirmed cases are lower (than its peers). As a result, the country’s gross domestic product growth this year is expected to log around 2 percent and 6 percent for next year,” said Bae Seung-kwon, head of KIM Vietnam Fund Management’s equity investment department.

Its stock market is also outperforming other Southeast Asian markets, with its index growing 15 percent more than Thailand and Indonesia, while over 10 percent more than the Philippines, he added. Followed by the strong performance, the expert also forecast that the country may newly join the Morgan Stanley Capital International Emerging Markets index as of May 2022.

The Vietnamese market has not yet attracted much foreign capital, but referring to the recent bull market and other favorable factors, an increasing number of foreign investors are expected to flock into the market for profits, according to Jeong Seong-in, team manager at KIM ETF.

“Based on the MSCI data, capital flowed into the US market first during a rally between the second half of 2017 and the first half of 2018. Then with the weak US dollar trend, next investment destination became emerging markets. Due to the change, frontier markets such as Vietnam also benefited,” Jeong added. “Another positive trend (in the Vietnamese market) is expected to emerge soon.”

By Jie Ye-eun (yeeun@heraldcorp.com)
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