Bond funds shine in 2024
Bond funds shine in 2024
The inflow of capital into bond funds is noteworthy, driven by investment returns outpacing bank savings rates.
Bond funds offer stable returns with expectations of higher profits than savings interest rates. — VNA/VNS Photo |
Amid the stagnant stock market environment, bond funds have emerged as an attractive option for investors, especially when profits they have brought significantly surpasses that of bank savings.
On the domestic market, bond investment funds are gaining popularity, with notable examples such as Bảo Việt Bond Fund (BVBF), Dragon Capital Bond Fund (DCBF), MB Bond Fund (MBBond), SSI Bond Fund (SSIBF), Techcom Bond Fund (TCBF), Techcom Flexicle Balance Investment Fund (TCFF), VCBF-FIF, VinaCapital Enhanced Fixed Income Fund (VFF), VND Bond Fund (VNDBF) and VietinBank Bond Investment Fund (VTBF), all of which are open-ended funds.
The inflow of capital into these bond funds is noteworthy, driven by investment returns outpacing bank savings rates.
Bond funds are open-ended funds primarily investing (from 80 per cent of net asset value onwards) in various bond types such as government and municipal bonds, corporate bonds and other securities.
With a cautious investment strategy, they mainly target lower-risk assets compared to stocks, offering stable returns with expectations of higher profits than savings interest rates.
Based on these expectations, bond funds have proven to be profitable in 2024.
By the end of November, the performance of bond investment funds showed better growth compared to the previous month, with 21 out of 23 funds outperforming or matching the average savings interest rate, according to FiinTrade data.
Leading the pack is BVBF with a 1.9 per cent monthly performance, marking the highest growth rate since the beginning of the year due to significant allocations in bonds from Vietinbank (CTG) and Agribank. On the contract, TCBF recorded a negative performance, down 0.1 per cent, for the first time in 2024.
TCBF's portfolio consists of 41.8 per cent cash or cash equivalents, and 58.1 per cent corporate bonds (a sharp increase compared to October).
The majority of corporate bonds held by TCBF are from Vingroup (VIC), MEATLife (MML) and Novaland (NVL).
Accumulated over the first 11 months of 2024, 20 out of 23 bond funds have yielded higher returns than the 11-month 2024 savings interest rate (4.2 per cent).
TCBF maintains its leading position with the highest performance (12.3 per cent), followed by MBBOND with a growth rate of 7.5 per cent.
According to FiinTrade, in the past year, bond funds have seen net inflows exceeding VNĐ13.4 trillion.
TCBF accounted for 81.6 per cent of the total net inflow value to VNĐ10.9 trillion. This fund has significantly outperformed other bond funds in the market with an 11.5 per cent increase since the beginning of the year.
Other bond funds have also attracted positive inflows, such as DCBF receiving over VNĐ1.63 trillion, VFF VNĐ1.61 trillion, An Bình Bond Fund (ABBF) VNĐ1.62 trillion and Dragon Capital Income Plus (DCIP) VNĐ1.11 trillion.
