The Vietnam focused exchange traded fund Market Vectors Vietnam (NYSEArca: VNM) managed to beak above its 200 day-moving-average. Can the country’s fundamentals maintain this level?
“There has been so much negativity with regard to emerging Asian equities over the last 12-18 months. Some of it has been attributable to concerns of a ‘hard economic landing’ in China, while some of it has been due to fears regarding Europe’s recession and debt crisis,” Gary Gordon said on Seeking Alpha. [International ETFs That Help Diversify]
Of the emerging Asian ETFs, there have been three that have outperformed the S&P 500. VNM is still in a downtrend, however, the fund has posted the strongest percentage gains of the Emerging Asia ETFs. [Vietnam ETF: Risks and Rewards]
SDPR S&P 500 (NYSEArca: SPY) has managed to gain 9.7% in 2012, compared to VNM which is up 21.3%. Compare this to the iShares MSCI Malaysia (NYSEArca: EWM) which has gained 7.5% in 2012 and the iShares MSCI China ETF (NYSEArca: MCHI) that is up 1.3% through July 30th and the SPDR S&P China (NYSEArca: GXC), up 1.1% through July 30. [ETF Chart of the Day: Vietnam]
In comparison to other frontier economies, Vietnam has managed to show resilience. Inflationary pressure that was seen earlier in the year, at 25%, was the country’s major challenge, and the governments’ efforts to quell the inflation has begun to make a positive mark on the economy.
Sean Geary for Emerging Money reports that in the second quarter, the Vietnamese economy grew 4.7% year-over-year. Further interest rate cuts and the governments policies to help grow the economy should help boost companies production and sales.
Much of the future well-being of the frontier economies will be dependent upon the outcome of the Eurozone debt troubles and the ability of major developed economies to maintain and post GDP growth.
Market Vectors Vietnam
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.