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Fund Profile

Vietnam Enterprise Investments 14 March 2023


This is a non-independent marketing communication commissioned by Dragon Capital. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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Vietnam Enterprise Investments Limited (LON:VEIL) is managed by the largest overseas investor in Vietnam, Dragon Capital, which has been investing in the country ever since its market reforms really started taking effect in the mid-1990s – even before the local stock market launched. This gives it a prominent position in the local investment community, and knowledge and experience of the market second to none.

VEIL has generated extremely attractive returns over the long run (see Performance). Returns have been well ahead of the benchmark Vietnamese index as the Dragon team, led by Dien Vu, have extracted significant levels of alpha. However, VEIL took losses last year as Vietnam retrenched in the face of difficult macro conditions and some local political controversies. Dien has shifted slightly more defensively, focusing on the highest quality companies with the strongest balance sheets which he thinks will be able to do well in a slightly higher inflationary environment (see Portfolio).

Vietnamese equities have already bounced off their lows seen last November. However, Dien expects the market to remain subdued in the first half of 2023, as the impact of tightening liquidity and higher interest rates is felt, with the potential for stock picking to add value as stronger companies outperform. However, he expects a pick-up in the second half of 2023 and a strong rebound in earnings in 2024, and notes that Vietnamese equities are currently very cheap by historic standards.

The long-run macro story for Vietnam is still very strong. The country is rapidly urbanising, with the government investing heavily in basic infrastructure to connect all parts of the country. It is attracting manufacturing from US, Chinese, and Taiwanese companies in search of cheap labour, and maintains good relations with both the US and China.

VEIL trades on a wide Discount of 17.1%, compared to a five-year average of 13.7%.

Analyst's View

Vietnam is an exciting long-term growth market. The country is experiencing rapid GDP growth as it urbanises, attracts overseas investment and steadily opens up its stock market and economy to foreign investors. It also clearly brings risks, with political and economic volatility expressed in volatile stock market returns. We think this means investors need to have a long-term view if they are going to invest. On that long-term view, the cheapness of the market after a difficult 2022 adds to the attractions, with VEIL’s double digit discount potentially adding to the return potential. We would also argue that Vietnam looks more attractive given the higher political tensions between the US and China. Vietnam can maintain links with both actors, and remains a key locus for manufacturing for global blue chips.

In our view Dien and the team at Dragon have expertise second to none given their long experience in the country and deep links to the corporate sector. The benefits of this have been seen in the significant alpha they have generated over the long run, with VEIL handsomely outperforming the local market. Dragon’s size and network in acquiring favourable structured deals and IPOs provides an extra, potentially exciting, source of returns.


  • Vietnam is an exciting structural growth story
  • Dragon Capital is the largest foreign investor in the country with connections and experience second to none
  • VEIL is trading on a double-digit discount, which could boost returns when market sentiment improves


  • High single stock risk which could hurt returns in certain circumstances
  • Single country funds bring currency risk and political risk, evidenced by recent fraud charges in Vietnam
  • High OCF (like the other specialist Vietnam trusts)
Continue to Portfolio

Fund History

06 Mar 2024 Gimme shelter
Growth opportunities to re-invest those magnificent profits into...
25 Oct 2023 Fund Analysis
Significant political developments may be about to give Vietnamese equities a big boost...
20 Sep 2023 Five questions about emerging markets
We track key developments in the diverse emerging markets universe…
14 Sep 2023 Results analysis: Vietnam Enterprise Investments
A rebound in H1 makes VEIL’s wide discount look attractive…
11 Aug 2023 Calling emerging markets
The rapid rate of smartphone adoption in emerging markets has improved lives and presents interesting opportunities to investors...
05 Jul 2023 Silk Road Strife
The Asian narrative has been dominated by the India vs China debate, but on which side of the line have investment trust managers fallen?
29 Jun 2023 Bear in a China Shop
All the speakers at our emerging markets-focussed event last week see battered valuations in emerging markets – with the exception of the largest of them all – as a big opportunity…
20 Jun 2023 Vietnam Enterprise Investments
Dominic Scriven
This webinar is part of our June online event 'Spotlight on emerging markets'...
Watch Recording
09 Jun 2023 Investing in Vietnam, with Dragon Capital Founder Dominic Scriven - Podcast: Trust Issues #18
We talk inflation, advances in tech and Vietnam's entry to EM indices...
28 Apr 2023 Will we see a resurgence in emerging markets?
We may be at the start of a new cycle…
27 Apr 2023 Results analysis: Vietnam Enterprise Investments
VEIL is trading on a wide discount, with the Vietnamese market also looking cheap…
30 Mar 2023 What I’m doing with my allowance this tax year
Two of our analysts debate whether to invest in punchier funds for the long term or take a more cautious view…
24 Mar 2023 ISA Event: Eastern promise
This week we heard from managers in Vietnam, India, China and more…
14 Mar 2023 Fund Analysis
VEIL offers access to an exciting growth market...
24 Mar 2023 Vietnam Enterprise Investments - Live from Saigon, a city of opportunity
Dominic Scriven & Thao Ngo
Rewatch this webinar from our month-long online series 'A feast of ideas for your ISA' hosted by the team at Kepler Trust Intelligence throughout March...
Watch Recording
24 Feb 2023 Piece by piece
Diversification is beneficial, but that doesn’t mean a country-specific allocation should always be avoided…
21 Dec 2022 Reasons to be cheerful
We find reasons to be cheery this Christmas in the long-term trends which are going to transform society and generate returns…
18 Nov 2022 The end of globalisation?
A change in the pattern of global trade seems more likely than a dramatic reversal of offshoring...
20 Oct 2022 Fund Analysis
VEIL is managed by the largest foreign investor in the fast-growing Vietnamese market…
15 Sep 2022 Same same but different
We discuss the case for emerging markets at different stages of development…
13 Sep 2022 Results analysis: Vietnam Enterprise Investments
VEIL’s wide discount may provide an attractive entry point for investors…
13 Jun 2022 Podcast: Investing in Vietnam with Dragon Capital founder Dominic Scriven
We speak to the man behind one of London's leading closed-ended funds...
01 Jun 2022 Are emerging markets doomed?
Bunching together different parts of the world leads to an unnuanced view of the opportunities in emerging markets…
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