ETF VNM does not make prices of indexes: Business manager

Director of Business Development of Market Vector ETFs (VNM), managed by Van Eck Associates Corporation headquartered in Madrid, Spain, Eduardo Escario said his VNM funds did not want to make prices on Vietnam stock indexes, the local newswire NDHMoney reported.



Reportedly, the Market Vectors ETF Fund Vietnam (VNM) has recently published the portfolios of holding more than $276 million cash on its website, but later it actively revised the figure to – $1.627 million.



Talking to NDHMoney, Eduardo Escario said: “This was the funds’ website making a mistake in publishing the wrong information, this figure has been fixed. I’m sorry for the problem that we have created”.



Escario said Market Vectors Vietnam confirmed that the fund is always making investments to try to follow the fluctuations of the Vietnamese market.



Dr Le Anh Tuan – Chief Economist, Research director of Dragon Capital warned Vietnamese investors should not pay so much attention to portfolio of ETF and avoid the investments following the fund because many of its stocks in the portfolio were purchased at the high price. Currently, shares in the ETF portfolio have a P/E from 18 to 19.5 times, while P/E of the Vietnam market is only from 9-10. Furthermore, 1-2 ETF managers have to monitor 4-6 ETF funds in many different markets, so they themselves do not care and can understand all the stocks they hold.



“We do not use derivatives, swaps or other financial instruments. If you keep track of our activities, you will see that we are rarely wrong and investors can easily track this because we simply adjust the portfolios closely following the developments of the indexes. We are not trying to better our portfolios against the overall market developments,” Escario said with NDHMoney.



His interpretation may be construed as Eduardo Escario’s funds are buying stocks in the portfolios so that certificate prices the NAV of the ETF funds are not far apart. Because if there was any big difference in these, this would be only a normal stock trading activity rather than “mission” of ETF. In fact, on the chart, the price of VNM ETF certificates and NAV of these funds have been always closely together in recent times.



“We are very transparent and always have daily reports on the stocks in the ETF’s portfolios and the stock market, so people can see that we only make investments in accordance with the market’s changes. The portfolio assessment on stocks composed in the index is done once a year and a method of calculating in this index is made by a third party, so we have absolutely no impact to any index,” said Escario.



A surprise is, according to Eduardo Escario, Van Eck Global is thinking of ETF listed in the stock market in Vietnam. “But there are still a bit early to talk about this,” said Escario.

Tags: Vietnam companies

Posted by VBN on Mar 25 2011. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry