The objective of VFMVF1 is to seek long-term earnings from equity growth and income through investing into a balanced and diversified portfolio, including equity, convertible and debt securities in Vietnam. The Fund normally invests approximately 80% of its NAV in equity and 20% in fixed income and cash. The targeting investments are growth stocks among large and midsized market capitalization stocks. The manager will apply a bottom-up approach to pick stocks in consideration of business model, long-term earning, asset value, cash flow potential and quality of management. The Fund may from time to time change the weight of equity and fixed-income investments at around +/-10% NAV from the targeted allocation to get an optimal asset mix in consideration of changes in economic market conditions.

In July, the market posted a modest gain of 0.5% over the previous month. The VNINDEX faced some corrections due to continued foreign outflows and short-term reversals in the U.S. and Japanese markets, which weighed on domestic performance. However, robust macroeconomic data from Vietnam in the first half of the year, along with solid Q2 earnings, provided a boost to investor sentiment. By the end of July, the NAV per share of DCDS decreased slightly by 1.0%. The portfolio was primarily impacted by Retail and Consumer sectors, with stocks like MCH (-5.4%), FRT (-2.4%), and FPT (-1.4%) facing declines after substantial gains earlier this year, leading to short-term profit-taking. The Materials sector, including HSG (-9.0%), HPG (-3.9%), and DGC (-8.9%), also saw adjustments in line with broader market trends. Despite these short-term fluctuations, these companies are industry leaders with strong, sustainable growth prospects and are expected to deliver solid returns in 2024. On the flip side, Banking stocks such as MBB (+13.5%) and CTG (+3.0%) - which are our top weightings within the sector - recorded significant gains in July. We also strategically reduced our exposure to cyclical sectors like Materials (5.2% of NAV as of end-July), Chemicals (3.0% of NAV), and Securities (2.5% of NAV). Year-to-date through the end of July, the NAV per share of DCDS has surged by 19.8%, outperforming the VNINDEX by an impressive 9.0%. Amid recent volatility in global markets, Vietnam’s economy continues to demonstrate a strong recovery, with steady growth in both production and services. The cooling of the U.S. dollar, alongside expectations of rate cuts from the Fed and well-contained domestic inflation, suggests that the global macro impact on Vietnam will be minimal and temporary. Looking ahead, the Fund will maintain a vigilant approach, focusing on reallocating into stocks with strong growth prospects in 2024F, especially those with attractive valuations following the recent market correction.