The Vietnam Fund returned +1.9% in July with a NAV of USD 1,904.24, a new all-time high, bringing the net return since inception to +90.4%. This represents an annualized return of +19.6% p.a. The July performance of the Ho Chi Minh City VN Index in USD was +0.9% while the Hanoi VH Index gained +2.1% (in USD terms). Since inception, the AFC Vietnam Fund has outperformed the VN and VH Indices by +47.3% and +52.8% respectively (in USD terms). The broad diversification of the fund’s portfolio resulted in a low annualized volatility of 8.77%, a high Sharpe ratio of 2.20, and a low correlation of the fund versus the MSCI World Index USD of 0.30, all based on monthly observations since inception.
After an excellent finish to the end of the first half of the year, Vietnamese markets consolidated in the first three weeks of July. Strong buying interest resumed in the last week of July and brought the indices back into positive territory.
The VN30 Index, which includes blue chips from both markets, corrected more than 6% from its top in early July before recovering most of its losses at month’s end. After breaking out of its long-term consolidation, the market now has to digest its recent gains which can be seen as a healthy pattern in a long-term bull market.
The medium-term outlook is not yet fully clear, but the sharp correction led the market to become short-term “oversold” from a technical perspective. These types of hefty short-term corrections are typical, especially during a long-term upward trend.