The total value of assets under management of fund management companies accounts for only 5.5 percent of Vietnam's GDP, still modest compared to some countries in the region. (Photo: VNA) This means the total value of assets under the management of fund management isstill modest compared to some countries in the region such as Thailand at 38 percentand Malaysia at 50 percent.
By 2030, the scale of the fund management market is forecast to reach 6-10 percentof GDP.
Since the inception of the first fund management company in 2003, the number ofinvestment funds has increased sharply to 70 funds.
The legal framework for the operation of fund management companies andinvestment funds has been continuously improved along with new types of fundssuch as open-ended funds, ETFs and real estate funds.
According to many experts, fund management and asset management activities indeveloped countries have become an effective investment channel and contributeto the sustainable development of the stock market. They said investing throughthe funds reduced risks for investors.
At the Pho Tai Chinh (Financial Street) Talkshow programme, Nguyen Quang Long,deputy director of the Fund Management Department under the State SecuritiesCommission (SSC), said that the total value of assets under the management offund management companies in Vietnam reached approximately 570 trillion VND (24.7billion USD) as of December 31, 2021.
From 2015 to the end of 2021, on average each year, the scale grew about 15- 25percent. Particularly in 2021, this market grew beyond the average thresholdand reached 31 percent.
Currently, there are 43 active fund management companies. The market has 70securities investment funds and in 2021 alone, 14 funds were established. Thetotal initial mobilised capital of these 14 funds was 1.5 trillion VND.
Long attributed this development to two elements. The first was that the fundmanagement companies themselves had enhanced management and human resourcescapacity.
Second, banks’ lowering interest rates was the driving force for the fundmanagement market and fund management companies to have a stronger developmentmarket.
Nguyen Phan Dung, deputy general director of SSI Fund Management Company(SSIAM), said that in 2021, the stock market flourished along with the growthof funds. The permission to establish open-ended funds and ETFs on the markethas met the needs of the market.
“Each person only has enough time and knowledge to study about five to sevenstocks, or a maximum 15 stocks. When participating in the stock market and forlong-term benefits, it is preferable to invest in medium and long-term channelssuch as buying fund certificates,” he said.
“In stock markets in the Asian region, investors tend to participate directlyin buying and selling individual stocks. However, in the European - Americanmarkets, besides participating in self-trading, the majority of investors alsoplan to allocate part of their investment portfolios to securities investmentfunds.
“Vietnam will follow the trend of investing in reputable funds to reduce risks.Vietnam's middle class will increase sharply in the next 10 years, possibly upto 30 million people. When the economy develops to a new level, financialplanning for individuals and families will receive more attention.
“In the history of the world fund management market, there have been caseswhere fund management companies went bankrupt and investors lost all theirmoney. However, current legal regulations are strict in separating assets offund management companies and those of investors. All assets must be depositedat a bank. These assets are monitored by a custodian bank. Therefore, in case afund management company is at risk of bankruptcy, the investors' assets arestill ensured,” he said.
Dung said that the profit ratio was important. Fund management companies mustcontinue to improve this ratio towards a more sustainable direction. Digitaltransformation using online tools is also a trend and training for investorsmust be focused on.
“Vietnam now has a relatively wide range of products. However, in each segment,there is still large room to develop such as with open-ended funds, ETFs orpension funds,” he said./.
VNA
