This year will be significant for fund management companies as theyprepare to apply a new cycle of regulations on open-end funds, saysVietFund Management Co general director Tran Thanh Tan.
An open-end fund is a collective investment scheme which can issue andredeem shares at any time. An investor generally purchases sharesdirectly from the fund itself rather than from other shareholders, incontrast with a closed-end fund, which typically issues all of itsshares at the outset, with such shares then being traded on an exchangeor between investors themselves.
"With open-end funds,fund management companies can launch diversified products and investorshave wider choices of investment types," Tan said.
About80 percent of investment funds worldwide were now open-end, heexplained, with closed-end funds existing mainly in developing countriesor countries with incomplete legal foundations for financial markets.
New regulations on the establishment and operation of open-end funds inVietnam, adopted late last year, will allow investors to withdraw theircapital periodically at a value close to the fund's net asset value(NAV), Tan noted.
The new rules will also make it easierfor funds to increase their charter capital, allowing them to takeadvantage quickly of market rallies without facing cumbersome proceduresto increase capital.
"The biggest problem in Vietnam isthat the margin between funds' market value and their NAV is very high,"he said. "If there is not a substitutional model, domestic fundmanagers can hardly operate as investors have almost no motive to pourmoney into funds."
VietFund Management has anticipated thelegal framework for open-end funds for four years and is well-preparedfor it in terms of facilities and human resources, Tan said. VietFundexpected to launch its first open-end fund in the second quarter with aninitial capital of 200-500 billion VND (9.5-23.8 million USD).
Tan also mentioned the possibility that VietFund would convert its VF1and VF4 funds from closed-end to open-end this year, a plan he saidwould be presented in an upcoming shareholders' meeting./.
An open-end fund is a collective investment scheme which can issue andredeem shares at any time. An investor generally purchases sharesdirectly from the fund itself rather than from other shareholders, incontrast with a closed-end fund, which typically issues all of itsshares at the outset, with such shares then being traded on an exchangeor between investors themselves.
"With open-end funds,fund management companies can launch diversified products and investorshave wider choices of investment types," Tan said.
About80 percent of investment funds worldwide were now open-end, heexplained, with closed-end funds existing mainly in developing countriesor countries with incomplete legal foundations for financial markets.
New regulations on the establishment and operation of open-end funds inVietnam, adopted late last year, will allow investors to withdraw theircapital periodically at a value close to the fund's net asset value(NAV), Tan noted.
The new rules will also make it easierfor funds to increase their charter capital, allowing them to takeadvantage quickly of market rallies without facing cumbersome proceduresto increase capital.
"The biggest problem in Vietnam isthat the margin between funds' market value and their NAV is very high,"he said. "If there is not a substitutional model, domestic fundmanagers can hardly operate as investors have almost no motive to pourmoney into funds."
VietFund Management has anticipated thelegal framework for open-end funds for four years and is well-preparedfor it in terms of facilities and human resources, Tan said. VietFundexpected to launch its first open-end fund in the second quarter with aninitial capital of 200-500 billion VND (9.5-23.8 million USD).
Tan also mentioned the possibility that VietFund would convert its VF1and VF4 funds from closed-end to open-end this year, a plan he saidwould be presented in an upcoming shareholders' meeting./.
