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VCVOF: Vietnam Stocks Have Fallen More Than 25% Off Their Highs, Time To Examine This CEF

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GV Strategies


  • Vietnam's economy has been one of the best performing in the world in recent years.
  • Unlike many developed markets, the best way to obtain exposure to their share market is via an active manager.
  • VinaCapital is developing a long improving track record of managing this CEF.
  • It generally trades at a discount of near 20% to NAV and that discount has scope to contract further.


For those not familiar with the VinaCapital Vietnam Opportunity Fund (OTCPK:VCVOF), the fund manager's website is an excellent resource to get further info after you read this. The US listing here has low liquidity versus the main London listing, an average day would see circa 30,000 shares trade. Investors should cautiously take that into account. I have previously traded its main London listing (VOF.LN) where liquidity is far greater.

Attractive economic fundamentals for Vietnam

It is hard to come across other economies near the size of Vietnam's where economic growth has been so strong in recent years. For Vietnam that has meant economic growth reliably printing above 6% over the last 5 years.

Over this period, they have kept inflation under control. This has been a welcome relief for investors who got burnt by the inflation volatility between 2008-2013.

Their younger, lower cost manufacturing labour force is seen as particularly attractive. On a relative basis to China, this has assisted in attracting FDI into the country. This can be a longer-term structural trend, which may even benefit further from trade wars between US & China in the shorter term.

From a political point of view, Vietnam seems to be escaping some of the instability that is affecting parts of the West. Debates over extremist political parties, migration, and any associated racial tensions haven't disrupted reforms taking place from the Vietnam government. Given the country's history, it is easier for the younger workforce to believe that they may enjoy a more prosperous future than their parents. They rank highly globally in terms of consumer confidence surveys. This area needs to be monitored, however. Some social unrest is evident due to concerns the government is being too open with investment coming from China.

The tourism industry is growing rapidly and will

This article was written by

GV Strategies profile picture
GV Strategies was formed to discuss unusual strategies that may fly under the radar of many global investors. They might relate to areas such as frontier / emerging markets, closed end funds and activism opportunities, high yield / emerging market debt to name a few.The perspective explored will be typically from that of a global investor based in developed markets and how such opportunities may fit a portfolio. Also, the practicality / opportunities for such investors to set up accounts in some frontier / emerging markets will be explored.In the past we have collaborated with other Seeking Alpha marketplace investing groups, i.e., shared articles with an exclusivity period for an additional fee. If an investing group wishes to discuss this possibility in the future, please get in touch. We may soon cover at least a couple of tickers a month as a guide by 2024. We will however only cover tickers we choose, and feel can offer some worthwhile insight on. They currently tend to be CEFs / ETFs.

Analyst’s Disclosure: I am/we are long VOF.LN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (9)

TD America sounds like a bargain compared to Fidelity.....good to know.
OXFC - You are absolutely right about the extra fees. Fidelity is the worst, adding a mind blowing $70 dollars to each way of the trade, ON TOP of the regular fee. However, I discovered E Trade does not impose these exorbitant fees. I opened a second account at E Trade that holds securities that are charged extra fees at Fidelity....E Trade also allows trades in ETN's that pay high dividends whereas Fidelity blocks me from trading in them. Big Brother watching over me:-)
0xfc profile picture
TD Ameritrade had a 15 dollar foreign security fee when I bought. FYI for all.
0xfc profile picture
Watch out for any extra fees from your favorite online broker.
I dipped a toe in a few months back. While down a bit it has held up well compared to some Chinese stocks in general.
GV Strategies profile picture
Good point Oxfc. I am based in Australia and use the London listing, and find my brokerage costs not very efficient. Wasn’t a major issue for me as I held for about 4 years last time and now am looking at it for the longer term. If you are trying to trade it regularly though something to keep an eye on.
Thank you, Steve. An excellent article on one of my favorite funds. Have been in it for over 4 years now. This is a great entry point IMHO.
GV Strategies profile picture
Thanks malka sounds like you would have done well. I was also in it during that time but took profits in late 2017. Then watched the market shoot upwards straight after and in early 2018. My recent entry might be slightly lower than where I sold but not much.
GV Strategies profile picture
No problem at all SC hope the readers find it useful.
Stanford Chemist profile picture
Thanks @Steve Green for the great analysis and for letting CEF/ETF Income Laboratory subscribers have a 2-week exclusive look at the piece!
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