Market Vectors unveils first US-listed Vietnam ETF

Van Eck Global has unveiled the Market Vectors Vietnam ETF on NYSE Arca, the first US-listed ETF tracking the Vietnamese market.

The fund tracks the Market Vectors Vietnam index, which is calculated and maintained by Standard & Poor's. Around 70% of the index comprises securities of companies domiciled and primarily listed on an exchange in Vietnam, which also generate at least 50% of their revenues from the country.

The other 30% of the index consists of offshore companies which generate at least 50% of their revenues from Vietnam, or show a significant or dominant position in the Vietnamese market, with expected growth. The index represented 28 companies in eight sectors, as of July 31, weighted at 37% financials, 19% energy and 12% materials.

Van Eck Global principal Jan van Eck says: "With approximately 70% of the market cap of the underlying index currently in locally-listed companies, this ETF offers investors convenient one-trade access to a portfolio of Vietnamese companies."

He explains that although Vietnam is currently experiencing inflationary pressures and current account deficits amid the global financial crisis, the country's market reforms should help it achieve its longer-term growth potential.

He adds: "We believe Vietnam's young demographic and increasing integration into the world marketplace will continue to appeal to foreign investors." Almost half of Vietnam's population of 90 million is under the age of 25, according to the Vietnam Trade Office.

Within the last 12 months, Van Eck has developed funds focused on emerging markets and Asia in particular, including Indonesia and now Vietnam. The latest Vietnam fund represents the asset manager's 21st ETF offering.