HSBC appointed custodian by Chinese fund giving access to Vietnamese capital market

Tianhong Asset Management’s QDII fund gives Chinese investor access into Vietnam’s booming capital market.

By Jonathan Watkins

HSBC Securities Services has been appointed as global custodian by Tianhong Asset Management’s qualified domestic institutional investor (QDII) fund which provides access to the Vietnamese capital market.

The QDII fund is China’s first dedicated mutual fund providing access channel for Chinese domestic investors into Vietnam, one of Asia’s fastest-growing economies with a GDP growth of 7% in 2019.

Through qualified institutions, Chinese market participants can invest offshore within allowable quotas, with Tianhong’s being $200m, according to data from the State Administration of Foreign Exchange dated September 2019.

Tianhong said its fund will invest no less than 80% of fund assets in stocks benchmarked against the VN30 Index.

“Vietnam is a booming market with great investment potential,” said Patrick Wong, head of China business development and client management at HSBC Securities Services.

“Tianhong AM’s QDII Vietnam fund has paved the way for investors to access the country’s equity fund and we are very delighted to be part of this development. With HSBC’s vast global network, we are positioned to support and connect our clients especially in China to access other frontier and emerging markets in Asia and the world.” 

HSBC was the first foreign bank to be granted custodian license since the market inception in July 2000 in Vietnam.

In a statement, the bank highlighted how the Vietnamese government has liberalised foreigners to invest in local stocks, however added it should be noted that there are still some obstacles to transferring money to Vietnam because of the foreign exchange control at home and abroad.