VietNamNet Bridge – The reported loss of 384.066 billion dong in 2010 for three funds VF1, VF4 and VFA makes many investors question the professional skill of the Vietnam Fund Management Company VFM. Other funds have also reported losses.

With the total net asset value NAV of 3,087.32 billion dong by the end of 2010, the losses incurred by the three funds had reached 384.066 billion dong, meaning the NAV reduction of 11.06 percent in 2010 on average. The sharpest reduction occurred with VF4 fund with the loss reaching nearly 25 percent of NAV.

Not only the investment funds managed by VFM, but many other foreign investment funds in Vietnam have also reported losses with considerable NAV reductions. However, among the funds that incurred loss, VF4 is the “champion”.

The Vietnam Emerging Market Fund ranks the second among the funds that incurred loss with the ratio of loss on NAV reaching 22.7 percent, while the figure was 18.7 percent for the Vietnam Equity Holding. Of the 10 investment funds which suffered the heaviest losses on Vietnam’s stock market in 2010 according to a Rothschild’s report, two are managed by VFM. One fund ranks first and the other one sixth in the loss ranking.

To many people’s surprise, the investment funds which have been less known in Vietnam, have reported good business results. Aseana Properties is an example. Despite the disadvantages due to the dong/dollar exchange rate fluctuations in 2010, the fund, with the total assets of 214 million dollars, still made profits from its investments. Meanwhile, the Vietnam Growth Fund also saw the NAV increase of 9.1 percent. Three other funds also saw NAV increases, but these  were modest, of less than two percent.

The 2010 business result of investment funds were different from 2009, when the NAV of nearly all investment funds increased. Especially, the Vietnam Emerging Equity Fund saw the sharp NAV increase of 80.7 percent in the year.

The investment funds for which NAV reduced by less than 5.3 percent in 2010 could be considered successful (5.3 percent was the dollar price increase against the Vietnam dong). Therefore, the big loss of 20 percent like in the cases of VF4 or Vietnam Emerging Market Fund is questionable.

Analysts say that the gloomy stock market in 2010 certainly had big impacts on investment funds’ operation and it is understandable why the funds make losses. However, they say that such too big losses could not be acceptable.

Surprisingly, the best performer as selected by investors is not an investment fund management company, a financial company, bank or securities company, but an amateur financial investor – PetroVietnam Construction Joint Stock Corporation (PVX). Maybe PVX was just lucky. In any case, investors still cannot understand why the investment funds incurred such a big loss.

Many question the enigmatic investment deals made by fund management companies. In 2009, investors witnessed a securities company continuously purchasing shares, when the prices of the shares were at their highest . A securities company bought a big volume of shares at the time when the price was raised from 22,000 dong to 90,000 dong per share. An investment fund in Vietnam accepted to sell the securities it had been holding for two years with the gross profitability of 1.5 percent right before the price of the shares increased by 45 percent.

Many investors have guessed that managers of the companies colluded with other parties to seek profit.

It is clear that investors have every reason to raise doubts, especially when they cannot be sure of the commitments the integrity of the people who make investment decisions.

Source: Dau tu