ETF Returns broken down…part 3 and final

For a final post on the ETF returns, I wanted to see if I could summarize what really drove the changes. Remember, the index rose around 9.1%.

VNM ETF. PRICE IS IN USD. SOURCE: YAHOO FINANCE

• VinGroup raised the index by 2.5pp.

• All other Vietnamese companies were effectively neutral.

• The Koreans added about 4.5pp to 9.0pp (not counting currency). The big difference here is that Uti Inc./Korea was added sometime during the half (I was unable to find out when). That makes a big difference.

• All other foreign companies added 3.3pp (not counting currency).

• Currency had an impact, but I am having some problems calculating this. It is between -0.1% to -1.0%, which is basically not helpful. I will have to think more about this, but I am pretty sure it is somewhere in this range.

• Cash was 1.2% of holdings at the beginning of the period and 0.41% at the end.

• VNM the ETF was trading at a slight discount (-0.65%) to the NAV value of the fund. It was a similar discount (-64%) at the beginning of the period.

Ultimately, I think if you were right about 1) the foreign companies and 2) Vingroup, you would be fine. And maybe hedge the currencies.

It’s weird to think that the only ETF for Vietnam is ony 2/3rds Vietnamese-traded companies and that so much of the returns in this go around were driven by the 1/3rd not traded in Vietnam.