VVF Monthly Report

Greetings John,

We have published our May 2023 Report for Forum One - VinaCapital Vietnam Fund (VVF).

• Vietnam’s retail investors did not sell in May; on the contrary, they were very active in the stock market, in particular by trading small-cap and mid-cap stocks, which helped to improve liquidity. While the VN-Index increased 2.3% month-on-month and 7.4% YTD, there has been a divergence of performance based on market cap categorization.  

• The Fund’s Class A NAV per share increased 1.7% (USD terms) in May, slightly underperforming the index, reflecting the portfolio’s tilt towards large and mid-cap stocks. As a disciplined investor, we do not chase after penny stocks or those driven by retail sentiment. We have a fairly high cash position, given our prudence on capital disbursement and our preference for maintaining a margin of safety on entry point.

• We expect continuing expansionary monetary policy and accelerated budget spending in the months ahead, both of which have historically had positive effects on the stock market. Given the current attractive valuations, we see a number of opportunities for companies we monitor, especially those at their full foreign ownership limit. We remain selective in picking stocks with strong cash flow generation, high earnings power and earnings visibility, or at inflection points.