Investment Approach

Vietnam Holding employs a long term investment approach, delivered by the Manager’s active management process. The resulting high conviction portfolio is focused on three core investment themes: Industrialisation, Urbanisation and the Domestic Consumer.

The Manager seeks companies that fulfil the following investment criteria:

  • Compounding long term EPS growth (c. 20% per annum)
  • Attractive valuations with a built-in safety margin
  • Strong balance sheet and cash flow management
  • Best management team amongst peers
  • Hands on Environmental, Social and Governance (ESG) analysis
  • Industry leaders with strong competitive position

Responsible Investing is a key component of the investment process. Read more here

The Company’s investment objective is to achieve long term capital appreciation by investing in a diversified portfolio of companies that have high growth potential at an attractive valuation.

The Company attempts to achieve its investment objective by investing in the securities of publicly traded companies in Vietnam, and in the securities of foreign companies if a majority of their assets and/or operations are based in Vietnam. The Company may invest in equity securities or securities that have equity features, such as bonds that are convertible into equity.

The Company may invest in listed or unlisted securities, either on the Vietnamese stock exchanges, through purchases on the OTC Market, or through privately negotiated deals.

The Company may invest its available cash in the domestic bond market as well as in international bonds issued by Vietnamese entities.

The Company may utilise derivatives contracts for hedging purposes and for efficient portfolio management but will not utilise derivatives for investment purposes.

The Company does not intend to take control of any company or entity in which it has directly or indirectly invested (an “Investee Company”) or to take an active management role in any such company. However, the Investment Manager may appoint one of its directors, employees or other appointees to join the board of the Investee Company and/or may provide certain forms of assistance to such company, subject to prior approval by the VNH Board.

The Company integrates environmental, social and corporate governance (“ESG”) factors into its investment analysis and decision-making process. Through its Investment Manager, the Company actively incorporates ESG considerations into its ownership policies and practices, and engages Investee Companies in pursuit of appropriate disclosure and the improvement of material issues.

The Company may invest:

  • up to 25 per cent. of its Net Asset Value (“NAV”) (at the time of investment) in companies with shares traded outside of Vietnam if a majority of their assets and/or operations are based in Vietnam;
  • up to 20 per cent. of its NAV (at the time of investment) in direct private equity investments; and
  • up to 20 per cent. of its NAV (at the time of investment) in other listed investment funds and holding companies which have the majority of their assets in Vietnam.

Any material change to the investment policy will only be made with the approval of Shareholders by ordinary resolution.

The Company is permitted to borrow money and to grant security over its assets provided that such borrowings do not exceed 25 per cent of the latest available Net Asset Value of the Company at the time of the borrowing, unless the Shareholders in general meeting otherwise determine by ordinary resolution.

The Company will adhere to the general principle of risk diversification in respect of its investments and will observe the following investment restrictions:

  • The Company will not invest more than 10 per cent. of its NAV (at the time of investment) in the shares of a single Investee Company;
  • The Company will not invest more than 30 per cent. of its NAV (at the time of investment) in any one sector;
  • The Company will not invest directly in real estate or real estate development projects, but may invest in companies which have a large real estate component, if their shares are listed or are traded on the OTC Market; and
  • The Company will not invest in any closed ended investment fund unless the price of such investment fund is at a discount of at least 10 per cent. to such investment fund’s net asset value (at the time of investment).
  • Furthermore, based on the guidelines established by the United Nations Principles for Responsible Investment (UNPRI), of which the Company is a signatory:
  • The Company will not invest in companies known to be significantly involved in the manufacturing or trading of distilled alcoholic beverages, tobacco, armaments or in casino operations or other gambling business;
  • The Company will not invest in companies known to be subject to material violations of Vietnamese laws on labour and employment, including child labour regulations or racial or gender discriminations; and
  • The Company will not invest in companies that do not commit to reducing in a measurable way pollution and environmental problems caused by its business activities.

In 2023, the Board will propose at the Company’s annual general meeting an ordinary resolution that the Company will continue as presently constituted. If that resolution is passed, the Company will continue its operations indefinitely, unless the Board, at the time of the annual general meeting in 2023, considers it appropriate to provide for a further continuation resolution.

If the continuation resolution in 2023 is not passed, then the Directors will be required to formulate proposals to be put to Shareholders to either wind up the Company or to implement a reconstruction, amalgamation or other material alteration to the Company or its activities or any other appropriate alternative based on current circumstances as the Board thinks fit.

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