VTV.vn – Mr. Lu Hui Hung – General Director of Phu Hung Fund Management Joint Stock Company expects that the fund management industry in Vietnam will not only increase in quantity but also in quality in the near future.
The fund management industry will increase in both quantity and quality
2023 has passed as a challenging year for investors in the market, assessing the investment efficiency of funds in the past year, Mr. Lu Hui Hung – General Director of Phu Hung Fund Management Joint Stock Company said that in 2023, the difficulties of the fund management industry will gradually be removed, Many open-ended funds have recorded higher growth than the market average thanks to their acumen in seizing growth opportunities and portfolio risk management.
While the VN-Index ended 2023 growing at 12%, some open-ended funds recorded significantly higher growth than the VN-Index; Some open-ended funds even have a return rate of over 30%. According to information from the Vietnam Securities Depository and Clearing Corporation (VSDC), the number of participating funds as well as the frequency of transactions in 2023 have all recorded an increase, especially open-ended funds.
“I am very optimistic about the future development of the fund management industry in Vietnam. I expect the fund management industry to not only increase in quantity but also in quality in the near future, products related to the fund industry are more and more abundant, meeting many risk appetites as well as bringing higher efficiency to investors”, Mr. Lu Hui Hung said.
Currently, although more investors know about funds, there are still many investors who are not used to investing through funds, Lu Hui Hung said that there are many reasons.
The first may be because investors have not fully updated information about the fund industry. For example, they lack information about the different types of funds, the benefits that come with them, or wonder if their money is safe. Individual investors may also be dissatisfied by the fees and costs associated with some funds, causing hesitancy in investment decisions.
The second is psychological and behavioral. There are many individual investors who are influenced by unofficial sources of information or misleading advertising. They may face difficulties in accessing reliable sources of financial advice and guidance. Retail investors are also influenced by emotions, prejudices, and preferences when making investment decisions. Currently, individual investors do not really care about their risk tolerance, timing and investment goals. Therefore, they are less interested or impatient enough to think about which solutions from which funds might help them.
Third, it can be derived from the side of funds, many funds have a focus on customers with high net worth, so retail investors have not approached it.
In 2011, when the stock market went up strongly, investors kept buying and winning, then since Q2 2022, the market has had strong fluctuations and individual investors have faced many difficulties.
According to Mr. Lu Hui Hung, after experiencing market fluctuations, investors will also understand that it is difficult to get sustainable profits in the market without knowledge and experience about the market. At the same time, they will also seek and access reliable sources of financial advice and guidance.
“In fact, achieving sustainable returns in the market requires time, expertise and resources. And most investment funds have all these factors, as well as a variety of solutions to meet investors’ risk appetites,” said Mr. Lu Hui Hung.
Many investors will choose the fund as one of the investment tools
Assessing the potential of Vietnam’s fund management industry, Mr. Lu Hui Hung said that the total assets under management (AUM) of the whole fund management industry by the end of 2022 reached only 23.25 billion USD, equivalent to 5.7% of GDP, much lower than other countries in the region. Meanwhile, in 2017, in Thailand, this rate was 27.93%, or Malaysia was 31.57% …
The development of the Fund industry is highly correlated with the development of the stock market. Currently, the GDP per capita in Vietnam is about 4,000 USD. Based on experience in other countries such as Thailand, when their GDP per capita surpasses $5,000, the need for financial investment increases significantly. At the same time, this trend will accelerate the development of the Fund industry.
Besides, up to now, the ratio of stock trading accounts to the total population in Vietnam is about 7.5%, while this figure in other countries in the region is larger, even up to 92.1%. In particular, the percentage of fund certificate accounts opened is less than 1% of the population as of 9/2022.
“Thus, the increase in the number of trading accounts along with the development of the financial market will bring great capital to the stock market, attracting more investors to know and choose the fund as one of the investment tools,” Mr. Lu Hui Hung said.
Assessing the economy and stock market, Mr. Lu Hui Hung said that although it is forecasted to continue to face many difficulties and challenges, Vietnam’s macroeconomic and stock market in 2024 are expected to have brighter colors than in 2023, thanks to the support of many positive factors.
For the macroeconomy, Vietnam’s economic environment in 2024 is forecast to remain stable and less volatile, with the expected economic growth rate at over 6% compared to 5% in 2023.
In addition, the interest rate level as well as the exchange rate will also be maintained at a stable level. In addition, the Vietnamese government has also made a number of moves to loosen fiscal policy, thereby promoting economic growth. Moreover, the recovery in global trade growth will also be very beneficial for an exporting country like Vietnam, supporting improvements in domestic consumption, production and business activities.
Source: VTV.vn