Vietnam's investment management sector has witnessed remarkable growth, with 43 asset management companies reporting nearly 586.5 trillion VND (approximately $25 billion) by the end of 2024. This figure marks a 13% increase from the beginning of the year and reveals the sector's substantial contribution, accounting for about 8.2% of Vietnam's stock market capitalization.
Leading the charge is the Bao Viet Fund, which dominates the market with over 167 trillion VND allocated to trust management, along with an astonishing ratio of asset management to total assets sitting at 777 times. Following closely is Eastspring Investments, which manages over 156 trillion VND, and like Bao Viet, is supported by major insurance entities—Prudential in its case.
There are also other significant firms such as Dai-ichi Life Vietnam and Manulife Investment, both benefitting from similar backing by large insurance groups. This connection often translates to stability and focused investment strategies.
The data highlights the stark distance created by these four companies compared to the rest of their industry peers, as they constitute the four largest players within the trust management sector. An additional 14 companies have entered the club with significant trust management numbers, some pulling considerable funding from foreign sources, including KIM Vietnam, VinaCapital, Mirae Asset, and UOB Asset Management.
The trends leading these companies are notable—particularly the preference for investing heavily in safe financial assets. Most often, this means government bonds, which are seen as lower-risk investments compared to equity securities like stocks and mutual fund shares. This dependence creates distinct profiles for companies—Dai-ichi Life, for example, utilizes 82% of its trust assets for debt securities, with other top companies like Manulife and Eastspring investing 63% and 60%, respectively.
Interestingly, some firms, albeit fewer, have ventured more heavily toward equity securities. Dragon Capital is noted for its 59% allocation to stocks, whereas VinaCapital has allocated as much as 97%. This diversification indicates varying strategies to garner returns against economic uncertainties and changes.
Some companies have recently shifted their strategies, moving to funnel portfolios entirely toward term deposits and certificates of deposit. For example, Saigon Capital has transformed its investment structure significantly, transitioning entirely to cash deposits as of late 2023 after previous years predominantly engaging with bonds and equities.
This reliance on trust management has been very lucrative for many firms, yielding substantial management fees alongside various performance bonuses related to portfolio management. The revenue from management activities accounted for 47% of the total income of the industry as of the fourth quarter of 2023, indicating this model's importance even as the percentage has edged down from 50% earlier periods.
Several companies, such as I.P.A (IPAAM) and TCAM, have distinguished themselves by demonstrating remarkable growth attributed to the booming trust management segment, signaling the health and promise of this investment avenue.
Overall, trust management presents what many investment firms view as their lifeline, with some companies deriving as much as 98.8% of their total revenue from this venture. The entire industry saw trust management revenues reach nearly 452.3 billion VND, reflecting an 8% growth from the previous year's figures.
With these insights, the market indicates substantial areas for growth and evolutionary changes, particularly promising for companies maintaining efficient asset management practices. Continued monitoring of shifts can yield insights not only for investors but also for the broader Vietnamese financial market.