Delivering a return of 41%*, Vietnam has been the strongest performing Asian market during 2017. Representing over 13% of the Alquity Asia fund and 8% of the Alquity Future World fund, the country is a key differentiator versus our peers.
Mike Sell, Alquity’s Head of Asian Investments, has just returned from a trip to the country to assess the prospects for continued growth in 2018.
During his trip Mike visited existing and prospective fund holdings to gain insight into Vietnam’s market, the macro economic outlook, the implication of long-term themes and the companies best placed to benefit from them.
* Data in USD, correct as of 15 December 2017
Overall, I returned from Vietnam with our conviction in the macro outlook and core positions reaffirmed. Although we will remain alert for risks of overheating and stress in the fiscal or external accounts, these certainly do not appear to be on the horizon at the moment. While the market has risen over 40% this year, I believe valuations are proportionate given the growth outlook and the risk-reward trade-off remains favourable.
The major challenge lies in discovering attractive new ideas, in companies where the values of management align with values of minority shareholders. Over the course of my trip, I have identified some candidates with this potential, either now or in the medium term, and fully expect upcoming listings to create additional opportunities.