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Vietnam Income Fund

Fund Details

Target Return (%) 12%/annum
Target Size USD 100mn
Investment Focus Corporate bond and structured debt (mezzanine/convertible bond)
Fund Structured Open-ended fund (semi-annual subscription and redemption)
Fee Structure  1.5% Management fee
15% Performance fee (above a high water mark)
Min. Subscription USD 200,000 for individual
USD 5,000,000 for institution 
Expected Closing 1Q2020

Track Record: VEH versus VN Index

Track Record: VEH versus VN Index

Vietnam Income Fund (VIF) invests primarily in Vietnam corporate bond and structured debt. The fund is subject to investment, equities, foreign currency risk and the risks of investing in emerging markets specific to Vietnam market. VIF's investments are concentrated in Vietnam, and the value of the fund may be more volatile. The fund can invest in derivative instruments which may involve additional risks (i.e , leverage may cause greater volatility). Investors may suffer substantial loss of their investment in the fund. Investors should not invest in the fund solely based on the information provided in this document and should read the prospectus (including potential risks involved) for details.

Investment Objective

The fund aims to achieve stable dividend yield and long-term capital gain through investing primarily in corporate bonds and debts of companies having their head office or exercising a predominant part of their activities in Vietnam.

Why Invest in Vietnam and Why Now

  • Vietnam's deposit rate is the higher end of the global spectrum at 7% versus less than 1% in HK/China and 0% in Japan.
  • Credit tightening in bank lending and lack of an alternative credit supply are opportunity for funding gap in the capital markets.
  • Yields are attractive with good risk-adjusted for many corporate bonds (8-12%) and structured debt products (14-20%).
  • Significant room for growth given Vietnam's corporate bond value/GDP is only 2% versus 7.5% in Philippines and 6.5% in Thailand.
  • Vietnam is the biggest beneficiary of the US-China Trade War as companies shifting manufacturing base to Vietnam driven industrial park and real estate investment opportunity.
  • Free Trade Agreements (FTA) involving more than 50 partners will ad 2-3% of Vietnam's GDP growth over the next 5 years. Foreign Direct Investment (FDI), driven by young and low-wage workforce, Vietnam has attracted on average US$20 billion in FDI/annum.
  • Vietnam is a front-runner to join MSCI's Emerging Markets Index that will lead to a signification stock market surged.