Vietnam Enterprise Investments reports 27.7% NAV gain post-period

Vietnam Enterprise Investments Ltd (VEIL) reported a 7.7% sterling NAV decline in H1 2025, attributed to foreign outflows from large-caps following initial tariff announcements and an underweight in Vingroup. However, the fund experienced a robust 27.7% NAV recovery in the two months post-period, outperforming its benchmark by 4%, driven by its domestic-oriented portfolio as tariff concerns eased. With Vietnam's H1 2025 GDP growing 7.7% and an imminent FTSE Emerging Market upgrade expected to attract foreign investment, VEIL, currently trading at a 17% discount, has actively repurchased shares (8% in 2024, 10% in 2025) to address this valuation gap.

Analysis

Vietnam Enterprise Investments Ltd (VEIL) experienced a bifurcated performance in 2025, with its net asset value (NAV) per share declining 7.7% in sterling terms during the first half before staging a significant recovery. The H1 underperformance, which saw NAV fall 2.3% in USD terms, was attributed to foreign outflows from large-cap stocks following U.S. tariff announcements and the fund's underweight position in the outperforming Vingroup conglomerate. However, a sharp reversal occurred in the two months post-June 30, with the fund's NAV surging 27.7% in sterling, outperforming its benchmark by approximately 4%. This rebound was driven by its portfolio's tilt towards domestic-oriented sectors like banking and real estate, which benefited as tariff concerns eased. Supporting this recovery are strong macroeconomic fundamentals, including Vietnam's 7.7% GDP growth in H1 2025. The fund currently trades at a notable 17% discount to NAV, which the board is actively addressing through substantial share repurchases, totaling about 10% of share capital year-to-date in 2025. A key near-term catalyst is Vietnam's potential upgrade to Emerging Market status by FTSE, which could stimulate further foreign investment.

Key Decisions for Investors

• Investors may consider the current 17% discount to NAV, combined with aggressive share buybacks and a strong recent performance rebound, as a compelling entry point for exposure to Vietnam's growth story.
• The upcoming FTSE decision on Vietnam's potential upgrade to Emerging Market status is a critical catalyst to monitor, as a positive outcome could significantly increase foreign capital inflows and help narrow the fund's NAV discount.
• Despite the strong domestic-led recovery, investors should remain aware of the fund's demonstrated sensitivity to foreign sentiment and trade policy, as these factors were the primary cause of weakness in the first half of the year.