Vietnam is currently the eleventh-largest country weight in the iShares MSCI Frontier 100 ETF (NYSEArca: FM) with a weight of 2.56%.
Earlier this year, State Bank of Vietnam Governor Nguyen Van Binh told Bloomberg the central bank is urgently trying to enact legislation “for a government-backed asset management company, lenders and investors to buy and sell bad-debt assets and collateral at banks.”
The legislation is crucial because although VNM has tried higher on an annual basis over the past two years, the ETF tumbled in the second quarters of 2012 and 2013 due to fears about the fragility of Vietnam’s banking system, which has been riddled with bad loans and toxic debt. [Vietnam’s Bad Debt Effort Takes Shape]
Non-performing loans resided at 4.84% of total loans by Vietnamese lenders at the end of the second quarter, Bloomberg reported, an important point in VNM’s favor because the ETF allocates 35.8% of its weight to the financial services sector.
Market Vectors Vietnam ETF
