ETF Monitor – Time for foreign ETFs to review
Strategy Note 31/08/2022 145
- FTSE will announce their portfolio review for FTSE VN Index (FTSE VN ETF) and FTSE Vietnam 30 Index (Fubon ETF) on 02 Sep 2022.
- Market Vector also announce new portfolio for MVIS VN Index in 8 Sep 2022, which will affect V.N.M ETF rebalance process in this review.
- For FTSE Vietnam 30 Index, SSB and DGC likely to be in; while HDB and HSG might be out. SHB may be included to FTSE VN Index in this review.
- For MVIS VN Index, SAB and THD are likely to be removed.
Fubon ETF leads inflow capital among ETFs on VN market in 8M22
The Fubon ETF (track on the FTSE Vietnam 30 Index) still maintained its inflow capital momentum in Jul – Aug 22, while the VNDiamond ETF was withdrawn during the same period, to become the leading ETF in Vietnam with net inflows capital of VND5,718bn in 8M22. Fubon ETF maintains the 2nd net assets value among ETFs investing in Vietnam with value of VND14,254bn (only behind ETF VNDiamond).
Meanwhile, the FTSE VN ETF reversed in capital flow from mid Jul to Aug 22 to reach an inflow of 8M22 with a value of VND286bn. V.N.M ETF is still maintained its net withdrawal momentum with 8M22 outflow of VND983bn.
FTSE’s Indexes: SSB and DGC likely to replace HDB and HSG in Vietnam 30 Index; SHB may be included to FTSE VN Index in this review.
New FTSE’s indexes basket, including the FTSE Vietnam Index and FTSE Vietnam 30 Index will be announced on 02 Sep 2022, which will come into effect on 19 Sep 2022.
Base on data until 25/08/2022, we estimate SSB and DGC will be included into FTSE VN30 index in this review as SSB and DGC meet all FTSE VN30’s criteria, which the market capitalization of SSB and DGC ranked 11th and 18th, reaching VND62,101bn and VND35,008bn, respectively.
On the other hand, HDB and HSG likely to be excluded from FTSE VN30 as:
• HDB failed the screening test, specifically failing to meet the requirement that the headroom must be higher than 10% for constituents.
• As SSB and DGC got advantage to be include in FTSE Vietnam 30, HSG with the smallest capitalization in Top 40 will be excluded from the FTSE Vn30 basket.
ETFs tracks on FTSE’s indexes, with a net asset value of VND14,254bn (Fubon ETF) and VND7,191bn (FTSE VN ETF), will rebalance its portfolio on the previous trading date (16 Sep 2022).
We estimate Fubon will buy about 25.0m SSB shares and 3.5m DGC share, equivalent to about VND811.2bn and VND343.0bn, respectively. Meanwhile, Fubon will sell about 4.7m HSG shares and 9.3m HDB shares, equivalent to about VND103.7bn and VND246.9bn, respectively.
For FTSE Index rebalancing, SHB will likely to be included into the index and it will not remove any stocks in this review.
We estimate FTSE VN ETF will buy about 1.0m/0.5m shares of SHB/STB, equivalent to VND162bn/VND136bn in this review, while sold about 308k/231k shares of VHM/VIC, or VND184bn/VND150bn, respectively.
MVIS Vietnam Index (V.N.M ETF): SAB and THD may be excluded in this review
New MVIS indexes basket, which V.N.M ETF tracks on will be announced its new basket 08 Sep 2022 and will come into effect on 19 Sep 2022.
Base on data until 25/08/2022, we estimate that SAB and THD will be excluded out of V.N.M ETF in this rebalancing period since they did not meet the liquidity requirements of the index.
We expect the country weight of Vietnam to stay 82% of the index with the total number of Vietnam’s stocks is 41.
We estimate V.N.M ETF will buy about 4.0m/0.9m shares of SHB/KDH, equivalent to VND63bn/VND33bn in this review while sold about 0.9m/0.2m shares of THD/SAB, or VND49bn / VND39bn, in this rebalancing period.
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