Open-end funds keep attracting capital inflows

Open-end funds keep attracting capital inflows

Accumulated in the first quarter of 2025, net withdrawals of equity funds were more than VNĐ5.3 trillion, (US$ 20 million) double that of the previous quarter.

Open-end funds have maintained their capital attraction, with a net inflow of VNĐ700 billion in the first quarter of 2025. Photo cafef.vn

Though capital flows into open-end funds have shown signs of weakening, amid investors' caution over the US tariff change, such fund is the only group that has continuously maintained net inflows since the fourth quarter of 2023.

According to Đỗ Hồng Vân, Head of the financial data provider FiinGroup’s Data Analysis Division, equity funds suffered the strongest capital withdrawal pressure. Accumulated in the first quarter of 2025, net withdrawals of equity funds were more than VNĐ5.3 trillion (US$ 20 million), double that of the previous quarter.

In terms of month, March marked the fifth consecutive month of net withdrawal and was the month with the strongest capital withdrawal value.

Under the context, according to Vân, open-end funds have maintained their capital attraction, with a net inflow of VNĐ700 billion in the first quarter of 2025. Dragon Capital's VFMVSF led in attracting net capital inflows, with a focus on banking and retail stocks such as MWG and CTG.

Despite significantly decreasing compared to the average of more than VNĐ3.3 trillion per quarter in 2024, open-end funds are the only fund group that has maintained net inflows since the fourth quarter of 2023, in the context of strong net withdrawals from other fund groups including ETFs and closed-end funds.

The slowdown has clearly reflected the defensive psychology of institutional investors, in the context of the domestic stock market being exposed to risks from external factors, especially the US reciprocal tax policy.

According to experts, during periods of strong fluctuations in the stock market, individual investors with limited experience and expertise are prone to excessive psychological states. It is difficult for individual investors to achieve positive investment results as they often make quick sale when unexpected economic events occur and make quick purchase when the market recovers.

Meanwhile, the advantage of investment funds is that they have a team of experienced, highly specialised experts and methodical investment activities. This is the reason why investment funds still bring more positive performance in the medium and long term, despite being affected by market fluctuations.

For example, right before US President Donald Trump announced his unexpected tariff policy in early April 2025, which caused the VN-Index to decrease by more than 18 per cent in just the first two weeks of April, most investment funds proactively adjusted their asset portfolios to limit risks. Specifically, in March 2025, up to 19 out of 31 open-end equity funds increased their cash ratio compared to the previous month. 

Bizhub