Portfolio has soared since lower US tariffs were agreed: Vietnam Enterprise Investments

VEIL’s portfolio has soared since lower US tariffs were agreed..by Thomas McMahon

Overview

Vietnam Enterprise Investments (VEIL) has delivered strong performance in 2025 as the Vietnamese stock market has rallied despite significant volatility around US tariff announcements (see Performance). Manager Tuan Le has positioned the portfolio to benefit from domestic growth drivers, and these have been delivering excellent earnings reports for Vietnamese companies, which have exceeded his already high forecasts entering the year.

Since the start of June, VEIL’s NAV is up 27%, and the share price over 30%, with the portfolio’s areas of high conviction coming good. Tuan Le expects this momentum to continue into next year and beyond, with strong government support for growth via infrastructure investment and regulatory reform, which are designed to boost the private sector. He has positioned the portfolio in banks, real estate, and consumption-related names, all of which have done well this year and look set to deliver high earnings growth as the domestic economy flourishes. Tuan Le and his team expect US tariffs to have a limited impact on corporate earnings, and note that Vietnam is still competitive versus its regional peers, while exports are actually up on last year despite the controversy.

In fact, 2025 has been VEIL’s best since 2021. FTSE’s decision to upgrade Vietnam to emerging market status next year and a coming wave of IPOs both have the potential to boost the stock market in the coming months . VEIL was a cornerstone investor in this year’s blockbuster IPO, and is well-placed to benefit from a series of deals expected over the next year or two. Meanwhile, the portfolio is still modestly valued, despite the exceptional earnings growth expected.

The Discount remains attractive at 15.5% at the time of writing, despite narrowing substantially this year as the board has stated a commitment to bringing it under 10%. They have bought back a significant number of shares so far, demonstrating this commitment with action.
 

Analyst’s View

 
A wave of IPOs and an upgrade to emerging market status look set to boost Vietnam’s market in the coming months, adding to the momentum from a comprehensive reform programme aimed at expanding the private sector and making it the key driver of Vietnamese growth. The 7.5% GDP growth achieved in the first half of this year is particularly impressive given the controversy around US tariffs, which has not been enough to dampen the domestically generated growth. We think this shows the potential in Vietnam over the next few years, with regulatory and legal reform low-hanging fruit with a high potential impact. In our view, there could hardly be a more positive outlook for economic growth in Vietnam, with the caveat that policy and regulation must remain supportive for it to be realised, and so a change of personnel or policy objectives is a key risk factor to watch for.

VEIL offers access to this growth story via a portfolio managed by the longest-standing institutional investor in the country, with an ability to take advantage of IPOs that has been demonstrated by its acting as a cornerstone investor for 2025’s blockbuster deal. Additionally, the commitment by the board to narrow the discount — with an impressive number of shares purchased over the past two years — is another key factor to consider. We think the potential in the NAV and the discount is a powerful combination and should be attractive to investors looking for value opportunities.

Bull

• Vietnam has an exciting domestic growth story
• Dragon Capital is the largest foreign investor in the country, with connections and experience second to none
• VEIL is trading on a double-digit discount

Bear

• Trade policy and geopolitics remain risk factors
• Single-country funds bring both currency and political risk
• Higher OCF than generalist emerging markets funds

See the full research on Vietnam Enterprise Investments here >

 
_{Disclaimer
 
Disclosure – Non-Independent Marketing Communication}

_{This is a non-independent marketing communication commissioned by Vietnam Enterprise Investments. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.}

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