<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=4496002&amp;fmt=gif">

Ho Chi Min ETF

Photo by CreateTravel.tv on Unsplash

CSOP launches Vietnam ETF

CSOP Asset Management, one of the fastest-growing Hong Kong ETF issuers, has launched a plain vanilla Vietnam ETF.

 

The CSOP FTSE Vietnam 30 ETF (3004) tracks the FTSE Vietnam 30 Index.

The index is measures the performance of the 30 largest Vietnamese companies on the Ho Chi Minh Stock Exchange on a market weighted basis. A 10% cap is applied to the weights of the biggest stocks.

 

Reflecting the Vietnamese market, the fund gets one third of its weight from the real estate sector.

 

The fund charges 0.99%.


Bernie’s commentary – there’s a lot to say here

This may seem like something not worth covering but there is a lot of interesting stuff going on with this launch that’s worth highlighting.

 

First, Vietnam has had one of the best-performing stock markets in recent years. The country has been one of the biggest winners from the US trade war with China. Thanks to the trade war, US companies are looking for nearby alternatives with cheap labour, like Vietnam. This has helped Vietnam have Asia’s best performing share market the past five years.

 

Second, the Vietnamese stock market is named after Marxist revolutionary leader Ho Chi Min. I thought this was amusing. Its sort of like naming the London Stock Exchange after Jeremy Corbyn or Tony Benn.

 

Third, CSOP has been a bit of a silent horse in the Hong Kong ETF market. I was always told that launching ETFs in Hong Kong is a waste of time because the funds management industry is still run on that old-school trail commission system. The banks – which own the wealth management market – won’t give your ETFs shelf space unless you pay them. Yet CSOP has managed to make it work somehow. CSOP is majority owned by China Southern FM, one of the largest fund mainland fund managers.

 

Fourth, Premia Partners, an independent Hong Kong ETF shop, already has a Vietnam ETF that charges just 0.75%. Yet CSOP feels comfortable coming in at a 33% higher fee. CSOP clearly backs themselves – or doesn’t back Premia – to pull off an over-pricing manoeuvre like this.

 

Fifth, it’s hard to know who you’d sell a Vietnam ETF to. Institutional investors cannot spend any real time looking at a place like Vietnam because of the tiny role that it plays in major equity benchmarks. And institutional investors do not like drifting from benchmark. Meanwhile retail investors in Hong Kong prefer more volatile investments like warrants. But CSOP clearly knows something I don't. 

• Contact us

Have questions about this?

Speak to one of our ETF data specialists about how this applies to your fund range.

Get in touch

Bernie Thurston

Bernie Thurston is the founder and CEO of Ultumus, a leading provider of ETF and index data, calculation, and workflow solutions. With over 20 years of experience in financial technology, Bernie has been at the forefront of index and ETF innovation since 2003.

His finance career began at Markit, where as Managing Director for Equities he designed and developed products for index and ETF composition and dividend forecasting from 2003 to 2011. He then founded and led DeltaOne Solutions as Managing Director, building it into a global provider of index and ETF trading data and technology services. The company managed over 100,000 multi-asset class products before being acquired by Markit in 2015.

Following the acquisition, while working for an ETF issuer, Bernie identified fundamental issues in how index and ETF data was represented across the industry. This led him to found Ultumus in 2016, building solutions for ETF primary market operations. Under his leadership, Ultumus has grown into a market leader serving major financial institutions globally, with its ETF Order Management System (OMS) supporting create and redeem workflows worldwide and its PCF platform calculating and distributing portfolio composition files for ETF issuers across every major market.

Bernie sold Ultumus to SIX Group in 2021, where it continues to expand across Europe, North America, and Asia-Pacific. Known for building lasting teams and leveraging cutting-edge technology, Bernie is focused on establishing Ultumus as the backbone of the global index and ETF industry through standardisation and automation.

Related posts

Search IShares Blockchain
WEB3 ETF Search