Vietnam Fund: Accelerating Growth through China+1
China + 1 Strategy Accelerates Growth of Vietnam Equity Fund
Mario Timpanaro, Portfolio Manager at Aquis Capital, oversees the Lumen Vietnam Fund — a Vietnam equity fund that benefits from the region’s strategic geopolitical position and rapid economic transformation. With deep expertise in the Vietnamese market, Timpanaro shares insights into the fund’s allocation approach and outlines why Vietnam has become increasingly attractive to international investors.
“Vietnam has maintained an average GDP growth of 6.8% in recent years,” explains Timpanaro. “We anticipate the country’s upgrade to emerging market status by 2025.”
Vietnam’s young, highly educated, and ambitious population fuels its economic momentum. The country has emerged as a key player in global supply chain realignments, notably through the China + 1 strategy adopted by many Western companies. Its economic stability, low inflation, a strong local currency (the Dong), and a low debt-to-GDP ratio of around 40% provide solid macroeconomic fundamentals.
The Lumen Vietnam Fund — currently the largest UCITS-compliant Vietnam equity fundglobally — follows an active allocation strategy. Its portfolio focuses on the financial sector (25%), industrial zones, real estate, consumer staples like dairy products, manufacturing, and communications. The fund prioritizes steady returns and long-term, sustainable growth, supported by favorable demographics.
Unlike many emerging market portfolios, the fund avoids sectors like cement due to ESG concerns and exited manufacturing positions amid global demand slowdowns. Vietnam’s government is heavily investing in infrastructure, including a $5.2 billion international airport near Ho Chi Minh City, scheduled for 2025.
“In 2020, the fund returned 26%, followed by 49.6% in 2021, -29% in 2022, and 20% in 2023,” notes Timpanaro. “The Vietnam equity fund has delivered an average annual return of 9.74%, reflecting the strength of our quality-driven approach.”