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Learn About Open-ended Fund

An open-ended fund (OEF) is a pool of money belonging to many investors and managed by investment professionals at a fund manager. The fund is called “open-ended” because it does not have a definite term, and investors may join and leave the fund any time.

Learn About Exchange-Traded Funds (ETFs)

An exchange-traded fund, also known as an ETF, is an investment fund designed to track an index. Most ETFs are passive, and track market cap weighted indexes.

Invest with VinaSIP

VinaSIP (Systematic Investment Program) is an effective method of implementing a financial plan by investing a fixed, regular monthly amount in an open-ended fund professionally managed by VinaCapital.

FAQs
Question 1: What is the VinaCapital Fund Management company?

VinaCapital Fund Management Joint Stock company is an independent legal company, licensed by State Securities Commission & as manage securities investment fund of domestic and international investors.

  • Fund Management Company operates on the stock market and closely supervised by the State Securities Commission.
  • The Operation and Business of the VinaCapital Fund Management
    • Establishment and management of securities investment funds
    • Securities portfolio management services
    • Securities investment advisory
Question 2: When you invest in an open-ended fund, is it a guaranteed return?
  • According to the provisions of law, Fund Management company must not commit investment profits of open-ended fund. However, investors will enjoy the full of return on investment of the fund after deducting fees. The fees of the open-ended fund are very small and gradually decrease over time.
  • According to the provisions of Clause 4, Article 22, Circular 98/2020/TT-BTC on “guidelines for the operation and management of the securities investment funds” issued by the Ministry of Finance, the Fund Management company must not include any the intention is to mislead investors as the investment value always increases, commits, or forecasts about the future investment results of the fund.
  • The history of the open-ended funds activities in Vietnam to date shows that investors are achieving high profits in the medium and long term compared to other traditional channels.
  • Clients who invest in open-ended funds managed by VinaCapital have MIO online accounts that can track their investment results anytime, anywhere and can take profits/cut losses at the level they want.
Question 3: Does the open-ended fund distribute profits periodically?
  • An open-ended fund does not distribute recurring profits to investors, however the entire profit generated by the fund has been included in the fund certificates price causing the fund certificates price to increase.
  • Investors will receive the full investment profit when selling fund certificates to withdraw money.
Question 4: Can you interfere with the investment activities of the open-ended funds?
  • No, according to the operation regulations of the open-ended funds, investors will not participate in the daily investment decisions of the fund, but you can trust in the capacity of professional investors as a Fund Management company on their behalf to make investments.
  • The investment activities of the open-ended fund must comply the investment strategy, the investment sector, the investment limits as presented in the fund charter/ prospectus and in accordance with the law.
  • Although investors do not take part in the work of the fund management company, but an open-ended fund supervised by the State Securities Commission, the Auditing Firms, the Fund Representative Board, Annual General Meeting.
Question 5: Do investors know all the portfolios of open-end funds?
  • Yes, VinaCapital publishes a “regular report on the open-end funds performance” at the beginning of each month, which publishes the entire portfolio of the open-ended funds and other detailed information about the fund.
  • Investors view of the portfolio of the open-ended funds managed by VinaCapital according to the following guidelines: https://wm.vinacapital.com/  → “Information Disclosure” → Select the funds that you want to check” → “regular reports” → “fund performance report of month xx/yyyy year  → appear 1 excel file -> select “06029” to see the entire portfolio of the funds.
Question 6: How long investing in an open-end fund be effective?
  • An open-ended funds are medium and long-term investment products; therefore, investors participate in open-ended funds should use idle funds and maintain long-term investments until the target return is achieved or until there is a need to use the money for other purposes.
Question 7: How do you track your investment?
  • Investors can track their investments via online account on MiO (App&Website) everywhere every time
  • Functionality of the MiO online account
    • Make a subscription, and redemption order, transaction cancellation
    • Check your transaction history, balance amount, return
    • Update VinaCapital’s information
  • VinaCapital sends the monthly report to customers every 10th
    • Customer’s investment account statement
    • Fund Monthly report (factsheet)
  • Investors can update further information about their investment through the bank where the investment account is opened or call VinaCapital 1900636553
Question 8: Can you use the fund certificate as a collateral for a loan at the Bank?
  • Once you need the money for using, you only need to place a redemption order to sell the fund certificates to withdraw, the profit of investors is still fully enjoyed after deducting the sale fee according to the time of maintaining the → so there is no need to pledge the fund certificates to borrow money.
Question 9: How much does the fund certificates cost once investors make a redemption order?
  • Net assets value of the funds will be priced at the market price of the securities held by the fund at the time of sale. The fund certificates price is equal to the total assets of the fund divided by the total number of certificates of the fund and is publicly announced on VinaCapital’s website and MiO application.
Question 10: When will you receive the money after selling the fund certificates?
  • Investors will receive the money at T+5 day till transaction day (except for Saturday, Sunday, and holidays). T is a transaction day.
Question 11: If VinaCapital goes bankrupt, how will investors' money and assets be affected?
  • Investors will not be affected because the assets of the open-ended funds/Investors are deposited and supervised at the Supervisory Bank and not at the Fund Management company.
  • If the Fund Management company goes bankrupt, it will hold an investor conference to get the opinion with solution in two directions:
    • If the investor chooses to continue maintaining the fund, investors will choose another Fund Management company instead to continue to perform the investment task for the fund.
    • If the investor chooses to dissolve the fund, it will proceed to sell the assets of the fund and return the money to the investor because of the ratio of ownership of the fund certificates held.
Question 12: What is the role of the supervisory bank in the open-ended funds?
  • Manage the money and assets of the open-ended funds for investors
  • Supervision for the open-ended funds to operate in accordance with the law, the fund charter, and the prospectus, and for the last of the fund you can access the link to the
  • Do not let the Fund Management company impacted to the interests of the investor.
  • Valuation of the net assets of the open-ended fund
  • Tracking all the open-ended funds transaction, income, dividends.
Question 13: What are the open-ended funds managed by VinaCapital different with others on the market?
  • VinaCapital leads the market in terms of investment efficiency for customers. The open-ended funds managed by VinaCapital have been bringing high profits to investors in the medium and long term.
  • Competitive fee schedule compared to open-market funds.
  • Low minimum investment (VND2.000.000 for VinaFlex program, VND500.000 for VinaSip program) creates conditions for all investors to participate.
  • MiO online account makes it possible for investors to track investments anytime, anywhere.
  • Professional investment service.
Question 14: How to choose the right time to invest in an open-ended fund?
  • You cannot choose the right time to invest in the open-ended funds, lets invest as soon as possible once you have an available cash.
  • The best investment directions are early investment, periodic investment, and long-term investment.
Question 15: How is the open-ended fund (NAV/fund certificate) price valued?

Total net asset value (NAV) = Assets – Costs

 Total net asset value

(Net Asset Value – NAV)

Assets:

Stock market value (Asset x Quantity of each stock)

 Costs:

  1. Management fees
  2. Banking fees
  3. Transaction fees
  4. Other service fee

1.Valuation price: Market closing price of the stock/bond at the closing date
NAV/fund certificates=Total net assets value/Quantity of the fund certificates

Question 16: Can investors transfer, donate, or inherit fund certificates to others? (non-commercial transfers)
  • Yes, Investors may transfer non-commercial of the fund certificates ownership for the following purposes:
    • Transfer of the fund certificates ownership due to giving, donating, gifting
    • Transfer of the fund certificates ownership due to inheritance
    • Transfer of the fund certificates ownership due to court decision
Question 17: Can investors transfer the open-ended fund certificates to others without the purpose of giving, donating, inheriting (commercial transfer)?
  • No, according to the current regulations, investors are only allowed to make a subscription/ redemption order with the fund management, investors are not allowed to make a subscription/redemption with each other.
Question 18: How is the law protected when i participating in the open-ended funds?
  • An open-ended fund operates under Circular No. 98/2020/TT-BTC on “securities guiding the operation and management of securities investment funds” issued by the Ministry of Finance on November 16, 2020. The law gives specific and strict guidance on the establishment and operation of the Open Fund to protect the interests of investors.
  • Organizations related to open-plan activities include: QLQ company, supervisory bank, auditing company, other organization must comply with regulations & be under the management of the SSC
Question 19: Are the investment activities of the open-ended funds guaranteed in accordance with the law?
  • Yes, In the operation process, the open-ended fund is always closely supervised by the State Securities Commission, the Supervisory bank, the Auditing Firms, Fund representative board and annual investor conference.
  • The investment activities of VinaCapital’s open-ended fund must comply with investment policies as well as legal restrictions, the funds charters, and prospectuses.
Question 20: How do you receive the fund reports?
  • Every day: The Net Asset Value (NAV) report is publicly available on:
    • Customer’s MiO online account
    • Website: vinacapital.com
    • Information disclosure portal of the SSC
    • Website/App of open fund distribution/referral partners managed by VinaCapital
  • Every month: Fund performance report, published on the website:
  • Every quarter: Fund performance report, published on the website:
  • Every year: General funds performance report in a year, published on the website:
Question 21: Which are fees and taxes of the open-ended funds?
FeeVFFVIBFVEOFVESAF
Subcripton fee0%0%0%0%
Redemption fee <1 year2%2%2%2%
1 =< redemption fee <2 years0,5%1,5%1,5%1,5%
Redemption fee ≥ 2 years0%0,5%0,5%0,5%
PIT0,1%0,1%0,1%0,1%

 

Question 22: Can a company invest in an open-ended fund? How to open the account?
  • Yes, Institutional investors of all field can participate in investing in open-end funds.
  • Opening account documents of investors including:

       Legal documents:

    • Certificate of business registration (a notarized copy)
    • Tax registration (a notarized copy)
    • Decision of the Board of Directors to appoint legal representatives (a notarized copy)
    • Identify card of representative of the law (a notarized copy)
    • Sample signature registration sheet of the legal representative.
    • Opening a trading account form (provided by VinaCapital)
Question 23:  Can a foreign client invest in the open-end funds? What are the steps to open an account?
  • Yes, both individual and institutional investors are allowed to invest in the open-ended funds.
  • Foreign investors need to conduct three step to complete the procedure of opening an transaction open-ended funds account, including : open a securities transaction code, open a foreign indirect investment capital account (IICA), and open a fund certificate trading account at VinaCapital.
  • VinaCapital will provide a specific support to each foreign investor.
Question 24: Is the fund certificates inherited?
  • Fund certificates inherited in accordance with the law.
  • When there is an inheritance transaction of the fund certificates, VinaCapital will provide specific instructions for each investor.
Question 25: Is the open-ended funds investment likely to lose out of its capital?

 It does not happen, because:

  • With a MiO online account investment, investors can know the profit/loss of their investment anytime, anywhere.
  • An open-end funds are highly liquidity, so investors can actively take profits, cut losses at any time that they want → does not lead to the loss of all original capital.
  • Operation history of the open-ended funds up to now, all investors are achieving high profits in the long term.
Question 26: Does the investment fund have to declare personal income tax annually?
  • No, PIT from investment in an open-ended fund is 0.1% of transaction value. This tax is deducted at the source, so investors do not need to declare personal income tax from the open-ended fund investments.
  • The redemption money of fund certificates is transferred to the investor’s account, which means that all tax obligations and fees have been fulfilled.
Question 27: When is the best time to withdraw the open-ended funds?
  • The best time to withdraw the investment of the open-ended fund is when the investor has achieved the expected profit or when there is a need to use the money for other purposes.
Question 28: Why do investors have to pay a fee?
  • An open-ended fund is a product in which investors will enjoy all profits after deducting the redemption fee (If any). An open-ended fund is managed by the investment team of the fund management company after having a thorough analysis of the securities. In addition, there is also the supervision of the supervisory bank, the auditing firm, the fund’s representative board. Therefore, there will need to be costs for the operation of these units.
Question 29: Does an open-end fund money invest in a fund management company or project of a fund management company?

No

  • Investment assets of an open-ended fund are detailed in Circular 98/2020/TT-BTC on “guidelines for operation and management of securities investment funds” issued by the Ministry of Finance on November 16, 2020.
  • The permitted investment assets of the open-ended funds are mainly stocks, bonds, certificates of deposit, valuable papers, and other financial instruments.
Question 30: Can investors withdraw the profit and leave the original part to continue investing in the open-ended fund?
  • There are 2 ways to withdraw the profits:
    • Selling the entire number of fund certificates, then take the profit and reinvest the same value as the original capital.
    • Selling apart of fund certificates that equivalent to the profits that you want to take out, the remaining quantity of the fund certificates continues to be invested. The total number of the fund certificates will be reduced by the amount sold
Question 31: Is it a safe investment?
  • Yes, in terms of legality and liquidity, investing in an open-ended fund is a safe investment
    • Legality
      • The establishment and operation of the open-ended funds are clearly regulated by the Ministry of Finance according to the Circular guiding the operation and management of the securities investment funds No. 98/2020/TT-BTC).
      • An open-ended fund is closely supervised by 5 independent organizations to ensure the benefits of investors, including: the State Securities Commission,the Supervisory Bank, Annual General Meeting of Investors, the Board of Representatives, and the Auditing Firm.
      • When transferring capital contribution to the fund, investors do not transfer money to the fund management company’s account, but transfer money to the fund’s account which is opened at the custodian bank.
      • According to the regulations, the fund management companies must publish information on financial statements, net assets value, and prices of the fund certificates of the open-ended funds on their website.
      • Finally, an open-ended fund is a safer form of investment than other investment funds because it only invests in financial instruments with good liquidity in the Vietnamese market.
      • However, investing in the open-ended funds also has certain risks. The level of risk depends on the type of assets that the fund invests in. Relationship Manager will help investors choose an open-ended fund that suits their risk appetite. At the same time, investors will receive detailed advice to create an optimal investment portfolio, help achieve investment goals and minimize risks.
    • Liquidity
      • An open-ended fund is safe because of their high liquidity. Investors can easily join or withdraw investment capital from the open-ended funds at any time. Moreover, the fund management company is responsible for buying back all the fund certificates that have been sold at a transparently announced price at the time of transaction.
      • In conslution, investors can be completely secure when investing in the open-ended funds. However, choosing an open-ended fund is something investors need to consider, and investor can based on the critia to evaluate and choose the suitable one for your investment that can help you meet.
Question 32: What are the criteria to consider when investing in an open-ended fund?

There are 4 key factors that investors need to consider when choosing an open-ended fund including : People, Philosophy, Process, and Performance or 4P formula.

  • First P is People, is human resource. Investors needs to study about the professional management team of the? Are they stable?
  • The second is Philosophy. What is the philosophy of the funds? Is not it clear and suitable for investors?
  • The third is process, it means investment strategy: What is the fund’s investment strategy? How are securities analyzed, valued, and invested?
  • And the last P is Performance – Results of the investment: How much percentage of the fund annual return? Is it higher than other funds of the same type and higher than the reference profit?
Question 33: When should you invest in an open-ended fund?
  • Investors should invest in the open-ended funds soon once they have available cash
  • Reason for early investment
    • Take advantage of the compounding
      • Investing early helps investors take advantage of the power of the compounding. When investors received a compounding, it will continue to be added to the original capital to continue earning the interest. The earlier you invest, the longer the investment period, the more money you accumulate due to the compounding
    • Increase the capital, expand the business activity
      • Early investment will help investors quickly increase the capital to expand the business activities if investors are entrepreneurs
    • Bring a better quality of life
      • Investing early helps bring a better quality of life for investors and their families. If investors achieve financial prosperity soon their life will be more comfortable even, they are not working, their investments still generate passive income.
Question 34: How much I should invest in the open-ended funds?
  • In fact, investors do not need to have a huge amount of money to invest in the open-ended funds. The amount that investor can invest into the open-ended funds depends on three factors: one – the investor’s financial goals, two – when the investor needs to withdraw capital, i.e: investment time, and three is an available cash that investors can invest in long term or saving on each month. If investor does not want invests a big amount immediately, investors can choose a monthly periodic investment program.
  • A periodic investment program is a method of implementing an effective financial plan by investing a fixed amount, continuously every month. This will help investors make disciplined investments without having to worry about choosing the right time to invest, and average price that investors buy will be lower when the market fluctuates. In addition, the generated profit will be continuously reinvested, helping investors to take advantage of the compounding in the long term. Starting early and persisting in long-term investing will bring a lot of advantages to investors for prosperity and financial security in the future.