Vietnam ETF cuts risk

Article Excerpt

VANECK VECTORS VIETNAM ETF $16.49 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies and foreign firms that get a significant share of their revenue from the Southeast Asian nation. The ETF’s top holdings are No Va Land (real estate), 9.0%; Vingroup (conglomerate), 8.4%; Masan Group (conglomerate), 7.5%; Vietnam Dairy, 7.4%; and the Bank For Foreign Trade of Vietnam, 6.6%. The ETF’s MER is 0.66% The fund cuts some of Vietnam’s above-average political risk by investing part of its assets in firms that are based outside of the country, but do a lot of their business there. It’s a better approach than adding the thinly traded, or illiquid, shares of smaller domestic firms. Like many emerging markets, Vietnam has dropped lately. That’s because a growing U.S. economy and rising interest rates have pushed up the U.S. dollar. This typically results in capital flowing to the U.S. from emerging markets. That hurts investments in those economies. Even so, Vietnam still offers diversification and…