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VietNam Holding Ltd.

VietNam Holding Ltd. is a closed-end investment company dedicated to sustainable investments in equities listed on the public stock exchanges of Vietnam. Its shares are listed on London's AIM Market and Frankfurt's Deutsche Börse Entry Standard. The VietNam Holding fund is managed by VietNam Holding Asset Management.

VietNam Holding's objective is to generate high risk-adjusted returns by combining rigorous financial analysis with sustainability research and engagement. VietNam Holding is a value investor, incorporating Environmental, Social and Corporate Governance (ESG) factors in its investment analysis and decision-making processes. VietNam Holding seeks to achieve relative out-performance compared to the Stock Index of Ho Chi Minh City through a consistent investment approach.

The majority of VietNam Holding shares are held by Swiss banks and institutional investors in the UK. The fund also has a retail following consisting mainly of German investors.

Board of Directors

Min Kupfer - Chairperson^[1]
Nguyen Quoc - Head of the Audit Committee
Prof. Rolf Dubs - Head of the Corporate Governance Committee

Advisory Council

Juerg Vontobel
Markus Winkler
Dr. Le Dang Doanh
Dr. Caor Sy Kiem
Dr. Le Thi Bang Tham

History

VietNam Holding was founded in June of 2006 by Juerg Vontobel, who has been actively involved in the development of Vietnam's banking and capital markets since 1992. As an international banker with 10 years of executive management positions in Asia he previously advised the Swiss State Secretariat for Economic Affairs on financial sector reform in Vietnam. In this role Juerg Vontobel launched, among others, an extensive program to develop advanced corporate governance practices in Vietnam’s banking industry.

At the time of inception, VietNam Holding was established to invest primarily in the privatization of State Owned Enterprises in Vietnam. The majority of the portfolio was acquired during the initial public offering stage or in the over-the-counter markets.

The golden diamond at the center of the company logo is an ancient coil for wealth. The dome-shaped figure protecting it represents the Temple of Literature, the first university of Vietnam founded in 1070, and a subject of a national pride. The circular shape of the logo itself refers to unity, perfection and inclusion while the red tone conveys richness and good luck.

VietNam Holding Logo

VietNam Holding Logo

Investment Strategy

The fund's investment approach anchors on the pursuit of value that is not reflected in the price of Vietnamese stocks though the analysis of enterprise fundamentals. In addition, VietNam Holding maintains strong portfolio management discipline and has integrated ESG principles in its investment activities. VietNam Holding's investment portfolio adheres to the general principle of diversification. At the same time, the portfolio reflects a disciplined asset allocation approach.

VietNam Holding does not invest more than 10% of its assets (at the time of investment) in any single company, and no more than 30% of its assets in any single defined industry sector. The fund does not directly invest in real estate projects.

VietNam Holding actively engages with the management teams of its investee companies. It continuously monitors their commitment to shareholder interests and long-term stakeholder relationships. This engagement is an integral part of the investment rationale. VietNam Holding's active and cooperative involvement aims to improve company financial and ESG performance. Board members of VietNam Holding and the Investment Manager work with the portfolio companies to develop awareness of issues material to the company and its industry and to foster the adoption of international best practices.

As of December 2013, the domestic consumption and the agricultural investment theme each represented approximately one third of the total portfolio. The fund continues to seek sector and industry allocations that stand to benefit from these and other macroeconomic trends, in particular the growing urbanization of Vietnam's cities.

VietNam Holding may utilize equity derivatives contracts for hedging purposes, and hedge Vietnam Dong exposure against the US Dollar in the forward market.

ESG Integration

VietNam Holding is firmly convinced that the transparency of market practices and market participants is a key factor in defining the healthy and sustainable development of Vietnam's capital markets.

Demonstrating this corporate governance commitment with their own organizational structures, the Boards of Directors of VietNam Holding and VNHAM are strictly segregated. The corporate organization includes internal compliance and audit functions, which report to the board of VietNam Holding. An annual audit is conducted by a major international accounting firm, while the compliance reporting is the responsibility of the VNHAM board.

As an investor in Vietnam, VietNam Holding emphasizes the application of sound corporate governance principles in all of its investments.

The company fulfils its fiduciary investment responsibility towards its shareholders by incorporating environmental, social and corporate governance (ESG) factors into its investment analysis and decision-making process.

Environmental, social and corporate governance (ESG) factors are an integral part of VietNam Holding’s investment analysis and portfolio management processes. The Fund does not invest in companies that do not pass the test of rigorous financial and ESG analysis. We believe this approach will reduce portfolio volatility and lead to investments that are better positioned than their competitors and more profitable over the long run. In addition to prudent value investment analysis, a sustainability screen is applied to companies involved in controversial business practices and products including nuclear, defense, tobacco, gambling and distilled alcohol.

It will not invest in industries identified as inconsistent with VietNam Holding's sustainability guidelines including nuclear, defense, and distilled alcohol.

All ESG issues that impact a company valuation are taken into account. A set of ESG drivers which are expected to shape the competitive and operational environment in each business sector is used to identify and prioritize material issues for every portfolio position or target investment. This includes a comprehensive analysis of risk scenarios including the ESG impact on a company’s balance sheet and earnings potential.

Through its VietNam Holding Forum events and its own practices, VietNam Holding promotes acceptance and implementation of ESG principles within the investment industry in Vietnam. In 2010 VietNam Holding performed a comprehensive sustainability rating, covering 84% of its investment portfolio in 14 sectors. The rating was based on data gathered and assessed by the Investment Manager in partnership with the Swiss rating agency Inrate.