Dragon Capital Vietfund Management (DCVFM) | Fund Factsheet

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Bond Fund Important Update


Dear Valued Investors,

Since the conclusion of the 2nd quarter of 2022, the bond market has experienced negative challenges as a result of rising interest rate and liquidity difficulties of some big corporations’ bond. We’ve observed the ongoing trend of large redemption from bond funds on the market recently, including those of Dragon Capital Vietfund Management (DCVFM). From the operation point of view, bond funds need to either prepare enough cash to repurchase fund certificates from investors or sell bonds in their portfolio to have cash and maintain fund liquidity.

The DCBF (DC Bond Fund) and DCIP (DC Income Plus Bond Fund) are the two open ended bond funds that DCVFM currently offer to public investors. The assets of the two bond funds are separately managed by the custodian bank – Standard Chartered Bank Vietnam. Both bond funds are established and licensed by the State Securities Commission. These two funds are currently audited by PricewaterhouseCoopers, one of the four biggest auditing firms in the world. Despite the erratic nature of the market since the beginning of the year, both funds have performed stably. In particular, the DCBF fund had growth 6.74% from January 1st to November 17th, 2022, and the DCIP saw growth as of 2.75% from January 1st to November 23rd, 2022. The thorough evaluation procedure used by DCVFM was applied to the analysis and bond selection for the funds’ investment portfolio. Selected bond issuers are listed companies with strong financial governance. Before investing, bond profiles are carefully examined. The two bond funds’ monthly portfolio and investment report updates are transparently published on the website address: dragoncapital.com.vn under the Information Disclosure session of Investor Relations.

The current bond market is facing volatility that are caused by 1) significant bond issuances in 2020-2021, which has greatly increased the number of bonds coming to maturity this year and 2) increased interest rate that has triggered the capital outflow from bond funds for more competitive return investment channels. To ensure fund liquidity and respond to investors’ redemption, at an extraordinary large scale, fund managers need to utilize all cash resources including selling bonds at discount to quickly obtain cash. This has a detrimental effect on the market value of bonds, which also include many good quality corporate bonds with strong financial results and consistent yield. Consequently, the NAV/fund unit price of bond funds is directly impacted by the aforementioned situation.

Given the current difficult circumstance and the strong concern of investors about liquidity issue on the market, DCVFM will try all efforts to ensure normal operation and transaction for our bond funds, DCIP and DCBF and continue to keep close eyes on market for further actions. Investors at this stage may need to review and make decision with investments at our funds. We fully respect your decision and redemption charges for DCIP and DCBF will be removed in case you want to redeem as an act of sharing difficulty. The effective time for this will be from trading date 2/12/2022 to 28/2/2023.

Once again, we sincerely appreciate your support and trust on DCVFM and hope that we can remain your reliable companion on your investment journey. 

Best regards,