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EQUITY INVESTORS INCREASE EXPOSURE TO EMERGING MARKETS
(MENAFN- Perceptiona) Ms Quynh Le, Portfolio Manager of Dragon Capital’s Vietnam Equity (UCITS) Fund, said: “Our research shows that professional investors are confident about the future growth of emerging and frontier market equities, and fund managers are shifting their allocations to ensure they benefit from this.
“Vietnam stands out as a significant investment opportunity. The VN Index has a 2024 forward PE of just 9.1x, and we forecast earnings growth of 15-18% within our coverage universe. Electronics-led exports are expected to help drive GDP growth of 6-6.5% in 2024, bolstered by the new wave of semiconductor investment.”
The study, carried out amongst global and emerging market equity investors at pension funds, family officers, insurance asset managers and wealth managers who collectively manage around $1.64 trillion AUM, reveals that around four in ten (39%) currently think that the fund they help to manage is underweight in emerging market equities – with a further quarter (23%) saying their allocation is balanced.
This is despite nine in ten (90%) admitting they have already increased their allocation to emerging market equities since the start of 2023. Of these, around a fifth (19%) say they’ve already made a dramatic increase.
This increase in exposure to emerging markets comes as almost all (98%) of professional equity investors think that growth in emerging and frontier markets will outpace that of developed markets over the next five years.
When asked to select their top three reasons as to why they think professional equity investors will increase their allocation to emerging and frontier market equities, 81% selected the view that these markets are currently undervalued, followed by the view that they have huge benefits to gain from the technological revolution – in many cases more so than developed markets (selected by 74% of those surveyed). The third most selected reason is that growing middle classes in emerging markets make them an attractive long-term investment (70%).
Quynh Continued, “Vietnam is truly embracing the technological era, and the domestic banks are at the helm of this exciting digital revolution. MB Bank, for example, the largest private bank by assets at $38.9bn, has seen its number of e-bank users surge to 25 million from just 11 million in just two years. Additionally, in a nation of 100 million, the increasingly tech-savvy middle class is predicted to expand by 37 million by 2030, presenting a fertile landscape for sustained economic growth."
About Vietnam Equity (UCITS) Fund (“VEF”)
VEF provides investors with broad exposure to Vietnam’s public equity markets and seeks medium to long-term capital appreciation through investing in companies in key sectors contributing to Vietnam’s economic growth. VEF integrates ESG and sustainable practices into its investment approach and is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (SFDR).
“Vietnam stands out as a significant investment opportunity. The VN Index has a 2024 forward PE of just 9.1x, and we forecast earnings growth of 15-18% within our coverage universe. Electronics-led exports are expected to help drive GDP growth of 6-6.5% in 2024, bolstered by the new wave of semiconductor investment.”
The study, carried out amongst global and emerging market equity investors at pension funds, family officers, insurance asset managers and wealth managers who collectively manage around $1.64 trillion AUM, reveals that around four in ten (39%) currently think that the fund they help to manage is underweight in emerging market equities – with a further quarter (23%) saying their allocation is balanced.
This is despite nine in ten (90%) admitting they have already increased their allocation to emerging market equities since the start of 2023. Of these, around a fifth (19%) say they’ve already made a dramatic increase.
This increase in exposure to emerging markets comes as almost all (98%) of professional equity investors think that growth in emerging and frontier markets will outpace that of developed markets over the next five years.
When asked to select their top three reasons as to why they think professional equity investors will increase their allocation to emerging and frontier market equities, 81% selected the view that these markets are currently undervalued, followed by the view that they have huge benefits to gain from the technological revolution – in many cases more so than developed markets (selected by 74% of those surveyed). The third most selected reason is that growing middle classes in emerging markets make them an attractive long-term investment (70%).
Quynh Continued, “Vietnam is truly embracing the technological era, and the domestic banks are at the helm of this exciting digital revolution. MB Bank, for example, the largest private bank by assets at $38.9bn, has seen its number of e-bank users surge to 25 million from just 11 million in just two years. Additionally, in a nation of 100 million, the increasingly tech-savvy middle class is predicted to expand by 37 million by 2030, presenting a fertile landscape for sustained economic growth."
About Vietnam Equity (UCITS) Fund (“VEF”)
VEF provides investors with broad exposure to Vietnam’s public equity markets and seeks medium to long-term capital appreciation through investing in companies in key sectors contributing to Vietnam’s economic growth. VEF integrates ESG and sustainable practices into its investment approach and is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (SFDR).
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