At a glance
- VEIL rebounded in May as the US tariff pause provided relief for global equity markets, including Vietnam
- The fund was up 7.9% in May, slightly behind the 9.1% return from the Vietnam Index
- The property sector led the rebound, with almost all of VEIL’s residential and industrial property holdings delivering double-digit returns
Performance
Fund Commentary
Sentiment in the property sector strengthened in May as the government stepped up efforts to resolve long-standing legal and procedural bottlenecks. The rally was broad-based, with 12 of VEIL’s 13 property holdings outperforming the Vietnam Index, including all industrial park holdings. Momentum was supported by a series of policy signals, including the push to accelerate key infrastructure projects and a proposal to scrap construction permit requirements for new developments. The successful soft launch of The Privé by property developer DXG (+19.5% MoM) helped reinforce confidence in project execution. VHM also surged on the anticipation of four upcoming launches, totalling over 1,500 ha. Our property allocation accounts for approximately 22% of NAV, reflecting improving earnings visibility and land bank monetisation potential.
Banking was more mixed. While TCB and VPB held up well, most of our other holdings, particularly the state-owned banks, lagged the VNI. Investor caution stems from concerns that tariffs could dampen credit growth and weigh on economic activity. While this caution is not unfounded, Q1 results across our bank holdings remained solid, with steady credit expansion, stable NIMs, and healthy provisioning. Banks remain central to Vietnam’s long-term growth story, acting as the financial backbone for infrastructure, housing, and private sector development.
Despite the volatility earlier this year, valuations across both property and banks remain attractive relative to long-term averages. The portfolio is aligned with Vietnam’s structural growth trajectory and continues to emphasise earnings visibility, policy alignment, and selective exposure to sectors benefitting from renewed domestic momentum.
Stock in Focus: Dat Xanh Group (DXG)
Founded in 2003, DXG is one of Vietnam’s leading real estate and brokerage groups, with a current market cap of approximately $600mn. The company operates across the full real estate value chain, from development and construction to distribution and after-sales services. With a strong presence in HCMC and surrounding provinces, DXG leverages its extensive brokerage network and strategic land bank, comprising approximately 20 ha in HCMC, 30 ha in Binh Duong, and over 200 ha elsewhere, to capture Vietnam’s urbanisation and housing demand cycle.
In 2024, DXG recorded total revenue of approximately $200mn and NPAT of around $10mn, marking a strong recovery and reversing its 2023 loss. This was driven by handovers of high pre-sales projects such as Opal Skyline and Opal Boulevard, along with continued positive contributions from its flagship township, Gem Sky World. The company also resolved several legal bottlenecks, restarting stalled projects and improving investor confidence. For 2025, DXG has set official targets of $14.1mn in NPAT (+44% YoY) on revenue of $269mn. The company plans to launch new phases at Gem Sky World and its high-profile project, The Privé, in HCMC. Following the resolution of legal issues and the receipt of its construction permit in 3Q24, DXG aims to launch The Privé in mid-2025, with nearly 3,000 pre-launch bookings received. With one of the largest clean land banks among listed developers, a fully integrated business model, and rising market momentum, DXG offers excellent exposure to Vietnam’s real estate recovery and stands out as a compelling cyclical play in the coming years.
