FiinGroup Chairman: Professionally Managed Funds Outperform Individual Investors

Hanoi, December 6, 2024 – Mr. Nguyen Quang Thuan, Chairman of FiinGroup, participated in the seminar "Overview of the Capital Market in 2024 and Outlook for 2025" co-organized by VFCA and VietnamFinance Review. At the event, Mr. Thuan shared insightful perspectives on the development of the Vietnamese stock market and provided suggestions for market development.

Hanoi, December 6, 2024 – Mr. Nguyen Quang Thuan, Chairman of FiinGroup, participated in the seminar "Overview of the Capital Market in 2024 and Outlook for 2025" co-organized by VFCA and VietnamFinance Review. At the event, Mr. Thuan shared insightful perspectives on the development of the Vietnamese stock market and provided suggestions for market development. 

Institutional investors, particularly professionally managed funds, continue to outperform the overall market: 

Based on a data analysis of the performance of investment funds, including equity funds, ETFs, and domestic and foreign bond funds on the Vietnamese stock market, investment funds still have higher returns (calculated based on NAV growth) compared to the VN-Index and the benchmarks they use for comparison. For example, the top 20 largest equity funds recorded an average NAV growth of 18.93% while the VN-Index increased by 10.61% from the beginning of the year to December 3, 2024. And the data shows that if we review a longer period of 5 or 10 years, the results are similar. Of course, there are funds with lower results or greater volatility. 

Even ETFs with the goal of "tracking" the index still have higher NAV growth, when considering the top 20 largest funds. This suggests that we have room to develop more domestic institutional investors, which are investment funds, and this serves as a basis for partially attracting funds from individual investors as well as other domestic institutions to participate in professionally managed funds with proven capabilities and over a long period. 

However, Mr. Thuan also emphasized that researching and evaluating which fund to "invest in" is a very difficult task for retail and individual investors. The reason is that, similar to investment evaluation, we not only look at NAV growth but equally important is risk - reflected in the volatility and ability to generate sustainable profits of the funds. Mr. Thuan also shared some experiences and techniques for evaluating and selecting investment funds. Therefore, activities to evaluate and rank funds and fund management companies are very necessary to provide a basis and premise for the transparency of the fund management industry and to help this industry develop. 

Corporate Bonds: Creating a Precedent for Multi-Asset Investment by Funds: 

Domestic and international fund management companies are expanding their multi-asset management. International institutions participating in Vietnam also want to participate in both the equity and corporate bond channels and possibly in government bonds in the future. Therefore, reviewing and expanding investment restrictions and asset allocation is a necessary task alongside new solutions and regulations to improve information transparency and the quality of corporate bonds. 

For example, in the insurance industry, which is currently managing over $90 billion (including Vietnam Social Security), participation and allocation in corporate bonds is still very limited and still applies the risk-based capital framework. A suggestion is that we promote the application of the risk-based capital framework. 

Mr. Thuan also proposed that we need to strongly promote the formation of green bonds to increase product quality and attract better capital from domestic and international investors. Green bonds reached a total issuance value of about VND 6,870 billion and accounted for 2% of the total non-bank bonds issued since the beginning of 2024. According to FiinRatings statistics, there were 18 green bond issuances for the period 2018-2023, and in the first 11 months of 2024 alone, the market recorded 04 green bond transactions with a total value of VND 6,870 billion that were confirmed to meet international green standards. 

Please access and download the presentation deck (Vietnamese only) HERE 

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