Ho Chi Minh City Stock Exchange (HOSE)

Vietnam’s exchange-traded fund (ETF) (NYSE: VNM) was the third best frontier market vector performer in the first quarter of 2012, close to erasing 2011’s loses, Benzinga website reported.

This trend is set to last due in part to four key reasons. First, the ETF has not presented overbought tendency this year. Second, Vietnam’s free-market policies adopted during the 1980s facilitate a more open economy compared to many of its ASEAN neighbors. Third, Vietnam has actively sought foreign direct investment in technology, biotechnology and health care. Last, Vietnam’s five-year sovereign bond rise, along with local lenders owning close to US$575 million of surplus cash as of April 2012 is at the advantage of the ETF, which holds a 49% weight in financials.

Loïc Nigay is an Investment Analyst at Leopard Capital