More Economic Support Could Help Prop This Vietnam ETF

As economies continue to look forward to a rebound from the Covid-19 pandemic afflicting all parts of the globe, Vietnam is no different. The country looks to regain its economic footing, but like the majority of other economies, more government support and stimulus could go a long way.

“Growth in public investment disbursement hit its highest level for the past five years as many projects accelerated,” a Nhan Dan news article noted. “Exports rose compared with the previous month and the same month of last year while domestic commerce and transport recovered at a faster-than-expected rate. Total retail sales and consumer service revenue also rebounded thanks to nationwide consumption stimulus programmes. Such positive developments have yet to help all businesses recover but have created revenue and improved their liquidity.”

“Besides some bright spots in the economic picture, there have still been many grey areas over the past seven months,” the article added. “The index of industrial production in July rose at its slowest pace in years and trailed far behind the June level. Some key industrial products witnessed sharp declines or very low growth. The Purchasing Managers’ Index dipped below 50 after two months having stabilized above 50, this being the rate which separates growth and contraction.”

As developing countries like the United States are looking forward to another possible round of stimulus, maybe Vietnam will follow in tow.

“Experts have recommended that the government should weigh up its available resources and introduce stronger measures to support businesses, workers and the economy at large,” the article added. “Moreover, it is necessary to continue stepping up public investment disbursement and the promotion of private investment as ways to spur growth and create jobs in contracting industries.”

ETF Options to Consider

ETF investors who want to get overseas exposure to Vietnam can do so via the VanEck Vectors Vietnam ETF (NYSEArca: VNM). VNM seeks to replicate as closely as possible the price and yield performance of the MVIS® Vietnam Index. A company is generally considered to be a Vietnamese company if it is incorporated in Vietnam or is incorporated outside of Vietnam but has at least 50% of its revenues/related assets in Vietnam.

VNM Chart

VNM data by YCharts

ETF investors looking for broader exposure to Southeast Asia can look to funds like the Global X Funds – Global X FTSE Southeast Asia ETF (ASEA). The Global X FTSE Southeast Asia ETF (ASEA) provides investors with broad exposure to the Southeast Asia region, comprised of Singapore, Malaysia, Indonesia, Thailand and the Philippines by tracking the FTSE/ASEAN 40 Index.

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