Global X’s Newest Launch Offers Targeted Exposure to Vietnam

Global X ETFs announced in a press release the launch of its newest internationally-focused ETF, the Global X MSCI Vietnam ETF (VNAM). It joins a suite of international ETFs that offer single-country as well as regional exposures in parts of Asia, South America, Europe, and Africa.

Vietnam was one of only a few countries that exhibited GDP growth in the midst of COVID-19 in 2020 and reflects a country that is undergoing rapid economic growth. The average growth rate for Vietnam between 2000 and 2021 was 6.34%, and it looks to continue expanding through its competitive manufacturing sector, a strong position in trade globally, as well as growing its digital economy presence.

“Vietnam is a manufacturing powerhouse, particularly in the production of smartphones and computer parts. Additionally, Vietnam’s relatively young and tech-savvy population is spurring the takeoff of the country’s digital economy, while its position by the South China Sea has enabled its emergence as an important trade hub,” said Dillon Jaghory, research analyst at Global X, in the press release.

The fund seeks to invest broadly across Vietnam’s equities by tracking the MSCI Vietnam IMI Select 25/50 Index, an index that contains companies both within Vietnam or else headquartered and conducting the majority of their business within the country.

The index is rules-based and weighted based on the free-float adjusted market cap of the securities. A liquidity discount factor based on the annual traded value ratio of the security is applied. This balances the index so that less liquid securities have less weight.

The index contains companies of any market cap but limits the weighting by group entities so that no parent company can have make up more than 25% of the index.

“Given that Vietnam’s economic reforms and growth have captured global attention, Global X is leveraging our deep history in International Access ETFs to bring investors efficient access to a basket of Vietnamese securities,” said Jaghory.

VNAM carries an expense ratio of 0.50%

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