1. Investment objective The rapid increase in money demand shows that borrowing is large, the expansion of production activities also sends a positive signal in the context of the economys efforts to recover from the pandemic. Longterm growth and capital preservation are the first priorities in our objective lists. We have to get a vision to grow up, not only earning money. Every investor has a different risk tolerance for their investment options. A risk map is an overview of an individuals risk tolerance. A risk schema can also refer to potential threats to an organization. Therefore, our risk profile is conservative. The duration for investing will be more than 5 years. Actually, when we take a short time, it may help to decide easier, in my opinion, but it can not earn much benefits as longterm stocks. As a result, the shortterm liquidity is not allowed, we have no needs for cash. The discount rate is 6% (estimated by historical rates of returns).
EQUITY FUND Market Review The impressive growth of the US stock market has begun to break since the beginning of 2022 and ended on February 13 The S&P 500 Index officially became to be a bear market, which was reported a 20% drop from its peak On March 26, the market rallied strongly, the signal of the better outlook of retail businesses and the tightening of monetary policy issued by the Fed is no longer a serious concern Led by shares of Apple, Tesla, and Amazon, Nasdaq was the biggest gainer in the session CFRA Research strategist Sam Stovall said that with Q1 results, investors have reasons to be optimistic Macy's shares rose 19.3%, shares of two low-cost retailers Dollar General Corp and Dollar Tree rose 13.7% and 21.9% respectively because amid economic inflation, cheap goods were received will be most popular Investment objective and policy The expectation of a higher return in the future, as a reward for the sacrifice in terms of time and cash, which are tied up in the investment and the risk-taking The expected income of the company is not only the annual dividends but also the shareholder of the company, having the right to participate, speak, vote or stand for self-nomination at the annual General Meeting of Shareholders of growing up companies To build a portfolio with a minimum variance optimization, criteria have taken into accounts as per follow: • • • • US companies listed from: NYSE Market Cap: 19.223 US billion in 2015 Involving industries: Materials, Energy, Technology, Health Care, Utilities No short-selling The most common sense about ‘the way to profit maximization today’ is US stocks because of the market's characteristics, which is a high capitalization market With high capitalization market, it allows a huge number of transactions Another thing is that Dow Jones Index invented by Charles Henry Dow and Edward David Jones in 1884 presented the changes of 30 biggest companies in US market is considered to be oldest and most exact Therefore, when putting money into these 30 companies, we can reduce risks and be foreseeable the trend Risk profile Risk profile covers two types: • Systematic risk, also known as market risk, includes risks that affect the entire stock market, in other words, any investors who participate in Unexpected political events, world economic recession, interest rate fluctuations, exchange rate are representatives for the systemic risk This is a type of risk that investors cannot control, and cannot avoid, even when diversifying and allocating investments to different stocks Presented in the following forms: Commodity price risk Model risk Payment risk Inflation risk and interest rate risk • Unsystematic risks are risks that only happen to one industry or a certain field • Rating Risk • Audit risk • Legal risk • Social media risk High risk and dominoes are fundamental characteristics of the stock market The risks when investing in securities is something that investors need to learn carefully to prevent before taking part in the stock market Fund profile KEY FACT Currency Dates Launch date Close date Fund Type 100% equity US companies with big market capitalization Benchmark USD 1-Apr-22 22-Apr-22 Dow Jones Index Portfolio composition Symbol MSFTT GOOGA AMZNA BRK Bp META VV WMTW JPMJP MA HD BACB COSTC ORCLO VZV ADBEA CSCOC ACNA CRMS TMUST WFCWe UPSU Company name Microsof Alphabet Inc (Google) Class C Amazon.com, Inc Berkshire Hathaway Inc Platforms, Inc Meta Platforms, Inc Walmart Inc Morgan Chase & Co ard Incorporated Mastercard Incorporated Home Depot, Inc (The) Bank of America Corporation Costco Wholesale Corporation Oracle Corporation Verizon Communications Inc Adobe Inc Cisco Systems, Inc Accenture plc -Mobile US, Inc Fargo & Company Wells Fargo & Company MSMorgan Stanley Sector Technology Technology Retails Finance Technology Commercial Service Retails Finance Commercial Service Retails Finance Retails Technology Social Media Technology Technology Technology Technology Social Media Finance Logistics Finance Weight 2.60 4.68 8.42 10.20 4.60 4.60 1.15 0.29 0.07 0.23 0.74 0.23 4.00 0.20 16.00 12.00 8.00 4.00 1.00 0.10 2.00 9.00 MSM UNPU TAT&T SPGIS CVSCV LOW INTUI SCHWC AXPA Marsh & McLennan Companies, Inc TAT&T Inc IS&P Global Inc S&P Global Inc Health Corporation Owe's Companies, Inc Intuit Inc Express Company American Express Company Logistics Social Media Commercial Service Retails Retails Technology Finance Finance Technology 1.60 0.27 0.73 0.20 0.79 0.78 0.45 0.75 0.33 Sector diversification This outstanding performance has been noted in impressive measures of investment efficiency Sharp 2.81 Treynor 121.99% Jensen 43.89% In which: Standard Deviation is a statistical tool by which the dispersion of a data set relative to its mean is measured, the formula used is the square root of the variance, the excel will provide details According to Corporate Finance Institutes (2022), Sharpe ratio is under point, it means the investment deal is bad The point from 1-1.99 is acceptable, which you have to think about much For the point, it’s “delicious”, you have to eat immediately Our result shows that 2.81 is in range of 2-2.99, which means “great” Therefore, the Sharpe ratio reflected a positive signal The Treynor ratio is essentially the same as the Sharpe ratio calculating the risk and return of an actual portfolio However, the portfolio's beta, or systematic risk, is used to measure the Treynor ratio to represent the degree of changes The Sharpe ratio is calculated for a more accurate profit assessment The standard deviation of the portfolio is the variable in the formula for calculating the Sharpe ratio The formula as details below: Treynor = (portfolio return – risk-free return) / portfolio beta The Jensen index reflects risk-adjusted performance and represents the average return of a portfolio or investment, so that the capital asset pricing model (CAPM) prediction is calculated through the portfolio investment or beta and average market returns may be higher or lower depending on the Jensen index This indicator is alpha In there: R(m) = real return on relevant market index B = portfolio beta Review There is a strong growth scenario for global equities as equities often outperform bonds when the labor market is improving, as is the case now when economies recover from a recession For now, the financial conditions are still easy, the risk premium is reasonable, the returns continue to grow and that's enough for stocks to outperform bonds However, in the face of a complex set of macroeconomic challenges, Investors are leaning on a cautious approach A Barbell strategy tends to involve weighting on two separate groups of stocks to hedge against uncertainty This includes defensive stocks - offering consistent dividends and returns regardless of market volatility such as good quality stocks and those tied to transitions ESG and the digital economy, along with cyclical stocks Chinese yuan-denominated and emerging-market bonds over global bonds will be our goals for short-term purpose, both of them aim to "diversify investment portfolios and superior transfer” Despite the current risks, the future returns on Asian credits look very attractive compared to the US and Europe In alternative investment channels, We will focus on strategies that support cost-effective hedging against inflation related to sectors underpinned by “real” assets such as real estate and infrastructure globally and in Asia Part 2: Investment objective The rapid increase in money demand shows that borrowing is large, the expansion of production activities also sends a positive signal in the context of the economy's efforts to recover from the pandemic Longterm growth and capital preservation are the first priorities in our objective lists We have to get a vision to grow up, not only earning money Every investor has a different risk tolerance for their investment options A risk map is an overview of an individual's risk tolerance A risk schema can also refer to potential threats to an organization Therefore, our risk profile is conservative The duration for investing will be more than years Actually, when we take a short time, it may help to decide easier, in my opinion, but it can not earn much benefits as long-term stocks As a result, the short-term liquidity is not allowed, we have no needs for cash The discount rate is 6% (estimated by historical rates of returns) The standard procedure will be Financial Advisor shall help clients meet long-term financial goals, confer with client to create asset allocation, select assets in accordance with asset allocation providing sufficient diversification of risk and returns, control and report all investment costs, monitor all investment options and portfolio custodian, Value all portfolio holdings on a regular basis, provide monthly reports that include securities, cash flow, income, and the monthly change in value According to data from Vanguard, there is no universally agreed upon asset allocation Neither is there data to recommend rebalancing more frequently than annually Thus, the portfolio will be rebalanced annually, while attempting to minimize the tax consequences of asset sales Market overview The outbreak of the Covid-19 pandemic is a dominant factor affecting all socio-economic activities around the world, pushing the global economy into recession and creating a public health crisis Under the impact of the Covid-19 Pandemic, the Vietnam Stock Market experienced a sharp decline in the first quarter of 2020 before recovering and growing in the last two quarters of 2020 Firmly conquering all difficult developments As predicted by the market, SSI continued to record outstanding business results: revenue and profit before tax increased by 38.5 and 40.8% respectively compared to 2019 - successfully completing the business plan Along with efforts to maintain business continuity before outbreaks of pandemics a year, SSI is proud to provide a safe and fully qualified environment for each officer and employee to work with peace of mind The comprehensive income policy is maintained and guaranteed at the same level as before the epidemic has occurred With a system of policies promulgated and implemented in a relatively timely manner and continuously updated with new developments of the situation, Vietnam has succeeded in maintaining a positive growth rate in 2020 GDP growth may have recovered quite quickly from the third quarter of 2020 and the growth rate for the whole year of 2020 reached 2.91% over the same period, although much lower than the Government's target, but still belongs to the group of countries with highest growth rate in the world Inflation after a strong increase in the first months of the year (mainly from pork prices) has gradually stabilized, increasing by an average of only 3.23% over the same period last year due to the sharp decline in basic commodity prices Vietnam has protected its production, processing and manufacturing capacity in 2020, reflected in high export growth (7%), trade surplus reaching the highest level in history (20 billion USD) and Manufacturing is the main driver of GDP growth Meanwhile, the service sector (except financial services), especially those related to tourism and passenger transport, was heavily affected (the number of international tourists decreased by nearly 80% compared to the previous year) 2019) and it is likely to take many years to recover This can also explain why domestic demand has recovered slowly, increasing by only 2.6% over the same period (if excluding inflation, it even decreased by 1.2%) Vietnam Stock Market (stock market) ended 2020 successfully beyond expectations The two main indexes, VN-Index and VN30, have recovered spectacularly 67.5% and 75.3% from the bottom and regained positive growth of 14.9% and 21.8% for the whole of 2020 This is also the 5th consecutive year that VN-Index has outperformed the MSCI Frontier Market - MSCI FM (17.3%) In particular, the group of mid-cap stocks (mid-cap) has increased by 12% compared to the VN30 group after consecutive years of being less effective than this group Individual investors are the main driving force for the growth of Vietnam's stock market in 2020 The number of new accounts opened increased sharply month by month, reaching 63,075 accounts in December - the highest level in history by the end of 2020 Liquidity reached a record thanks to strong personal cash flow, matched transaction value on exchanges reached 621 million USD/session in December 2020 (up 53% compared to November and increased 343% over the same period) The average transaction value for the whole year of 2020 reached 267 million USD/session, up 79.2% compared to 2019 and 17.2% compared to 2018 In the opposite direction, for the whole year of 2020, the transaction rate Foreign investors' transactions were only 11.3% of the total transaction value, much lower than the level of 14 - 16% in previous years, and even dropped to only 7.3% in December Foreign investment net sold is 813 million USD in 2020, while the net inflow into ETF reached 193 million USD in 2020 If foreign capital inflows return in 2021, especially with a higher proportion for Vietnam in the MSCI FM index This will be a strong support factor for the stock market next year, as individual investors often act according to foreign investors Risk profile The following figure capture sectorial diversification of the fund Of which, Banks and Real estate accounts for more than half of the portfolio Table 1: Major contributor of the fund Stock HPG TCB VPB VIC VHM VNM ACB Amount 18,503,349 17,518,725 22,154,772 8,348,141 8,189,726 6,418,129 17,250,550 Value 905.7 907.5 835.2 876.6 692.9 562.2 574.4 % NAV 8.3 8.4 7.7 8.1 6.4 5.2 5.3 FPT MSN MWG Total 5,911,965 3,618,260 3,560,677 64.3 574.1 539.8 494.6 5.3 4.6 The largest investment of the fund is on HPG-the leading steel manufacturer in Vietnam Dragon Capital devotes a special interest for middle-cap banks with approximately 22% of the fund is allocated to this sector Apparently, the overall strategy of the fund is achieved with additional large investment in Vin group, thereby by forming a real-estate focused investment strategy Performance The fund outperforms the benchmark index in major measures Indeed, a lower P/E implies a higher growth potential for the fund By investing in middle to large companies (P/B of the fund is higher than that of the benchmark), the generated Dividend is also significantly higher than VN-index Although the statistical risk is slightly higher than VN-index, it is compensated by higher Sharpe ratio, implying that the fund is well managing the risk Fundamental ratios E1VFVN30 VN-Index P/E Ratio 14.8 17.5 P/B Ratio 2.8 Dividend Yield (%) 0.9 1.3 Number of holdings 30 404 Beta 1.1 Standard Deviation (%) 23.4 20.9 Sharpe Ratio 2.3 The above figures capture the accumulated growth of the fund Compared to the benchmark index, investing in the VEF would generate 75% higher returns Review In the first quarter of 2020, UCITS’s operating results were also strongly affected by the Covid-19 Pandemic At the end of 2020, UCITS's total assets under management reached VND 6,670 billion, an increase of 45% compared to the end of 2019, due to a decline in the market and investors withdrawing capital in panic and fear about the first wave of the epidemic With the efforts of the entire staff, UCITS's business results had a rapid and spectacular recovery in the last quarters of the year Total assets under management gradually increased with success in setting up new investment funds, increasing the size of existing funds, as well as winning a number of new portfolio trust customers By the end of 2020, UCITS's total assets under management reached VND 6,670 billion, up 45% compared to the end of 2019 Revenue from management fees reached 110% of the plan, but decreased by 26% compared to the previous year due to the recovery of total assets under management came mainly at the end of the year UCITS exceeded 21% of the profit plan set out at the beginning of the year REFERENCE Citywire Funds Insider (2020) Vietnam Equity (UCITS) Fund Available at: https://citywire.com/fundsinsider/fund/vietnam-equity-ucits-a-usd/c482765?periodMonths=12(Accessed: 13 July 2022) Corporate Finance Institute (2022) Sharpe Ratio Calculator Available at: https://corporatefinanceinstitute.com/resources/templates/excel-modeling/sharpe-ratio-calculator/ (Accessed: 13 July 2022) Dragon Capital (2022) Vietnam Equity (UCITS) Fund Available at: https://www.dragoncapital.com/vef/ (Accessed: 13 July 2022) ... beginning of the year REFERENCE Citywire Funds Insider (2020) Vietnam Equity (UCITS) Fund Available at: https://citywire.com/fundsinsider /fund/ vietnam -equity- ucits-a-usd/c482765?periodMonths=12(Accessed:... taking part in the stock market Fund profile KEY FACT Currency Dates Launch date Close date Fund Type 100% equity US companies with big market capitalization Benchmark USD 1-Apr-22 22-Apr-22 Dow... capture sectorial diversification of the fund Of which, Banks and Real estate accounts for more than half of the portfolio Table 1: Major contributor of the fund Stock HPG TCB VPB VIC VHM VNM ACB