The surge in income and accumulated wealth has created a growing affluent class in Vietnam, fueling rapid growth in the wealth management industry. Can you share insights into the current trends in the use of discretionary investment services globally and in Vietnam?
Mr. Hồ Quốc Bình: Wealth Management has a long history and has become an integral part of the global financial system. It is a comprehensive financial service that provides investment and financial management solutions for individuals or institutions, covering various aspects such as investment allocation guidance, investment advisory across asset classes, tax advisory, retirement planning, inheritance and legal support…
Wealth Management in Vietnam is still in its early stages compared to the world, with a basic product structure, mainly limited to discretionary investment in stocks, bonds or equity and bond fund certificates. However, the legal framework governing fund management companies and investment funds has been gradually improved, along with the emergence of new funds, including pension funds, exchange-traded funds (ETFs) and real estate investment trusts
McKinsey & Company forecasts that Vietnam will become a personal financial advisory market worth approximately $600 billion by 2027, corresponding to a growth rate of over 11% per year from $360 billion at the end of 2022.
In your opinion, how can we manage wealth Safely – Effectively – Sustainably?
Mr. Hồ Quốc Bình: Firstly, it is crucial to identify potential asset classes that are legally permitted. Secondly, one must understand their own risk profile, have an asset allocation strategy, set long-term financial goals and set return expectations that are aligned with their risk appetite. Finally, it is essential to have deep investment knowledge, experience and expertise in each asset class to achieve better returns than the average returns of those assets.
Mr. Hồ Quốc Bình – Head of Portfolio Management (TCAM)
To accomplish these tasks most effectively, investors need a foundation of specialized financial knowledge and a deep understanding of investment across various asset classes. Therefore, the most direct way is to seek out professional Wealth Management organizations, where they can collaborate with wealth management advisors.
The Vietnamese financial market has experienced significant fluctuations recently. What is your outlook for the Vietnamese financial market from now until the end of 2024? Is this an opportune time to invest?
Mr. Hồ Quốc Bình: The macro environment is still facing pressures from exchange rates and the political situation both domestically and internationally. It is difficult to predict, as at the beginning of the year, almost all parties were optimistic that the FED would cut interest rates early, but the reality now is probably not the case. Professional wealth management organizations like ours always make forecasts based on information available at the time, but it is more important to constantly update and adapt to new developments and have multiple backup scenarios rather than just a single scenario.
TCAM’s consistent and overarching view is that investment and asset allocation is a long-term process that can be tied to the entire life cycle of an individual or organization. Within this, allocating assets to the stock market is essential as it is one of the largest asset classes not only in Vietnam but globally. Therefore, the starting point is not too important, what is important is to start as soon as possible after fulfilling all the factors of Safety – Efficiency – Sustainability as mentioned above.
In times of difficulty, there are always opportunities, especially when taking a longer-term view, it is clear that the economic outlook for Vietnam in general and the Vietnamese financial market in particular still has a lot of room for growth. Vietnam remains one of the fastest growing countries in the world, with a large domestic market of over 100 million people and exports goods to all continents, a golden population structure with an abundant labor force at competitive costs with increasing skills, attracting a significant amount of foreign direct and indirect investment. The financial market is becoming increasingly sophisticated in terms of legal framework, operating mechanisms and product portfolio, meeting higher standards in line with international practices. And one important thing I think everyone can see is that the flow of money into the market is increasing, as evidenced by liquidity and transaction values on all exchanges.
The rapid increase in wealth has made the Vietnamese wealth management market increasingly attractive. Instead of managing their own wealth, many people are looking to professional wealth management service providers. Assuming an individual or organization entrusts TCAM to manage their wealth, how would TCAM proceed?
Mr. Hồ Quốc Bình: As I shared earlier, to manage wealth Safely – Effectively – Sustainably, investors will need a professional wealth management organization. At TCAM, we have a team of professionals who meet international standards and have a deep understanding of the Vietnamese market. In addition, we have strict processes and evaluation systems, where if clients are willing to share sufficient information, we can provide truly useful advisory results.
The steps in TCAM’s Wealth Management process:
Determine each client’s investment objectives and constraints: Determine each client’s target rate of return, risk tolerance and constraints. TCAM uses tools researched and developed by our team to determine the client’s risk profile as accurately as possible.
Allocate assets in line with each client’s needs and constraints: TCAM provides asset allocation strategies that balance potential returns and risks, based on each client’s expected rate of return, risk tolerance, and investment constraints.
Implement flexible portfolio management and rebalancing, with strict risk control: Experience in portfolio management to avoid high volatility will help clients have a different investment experience.
Behind each investment asset is a team of professional investors who constantly evaluate and seek new investment opportunities based on thorough fundamental analysis as well as technical and quantitative analysis.
What has been TCAM’s investment performance in recent times, Mr. Bình? What are the professional and ethical principles that TCAM sets out when becoming the wealth management organization for clients?
Mr. Hồ Quốc Bình: With the motto “Quality makes the difference”, TCAM aims to deliver stable and sustainable returns to meet clients’ long-term financial goals. The investment portfolio managed by TCAM has achieved an average return of approximately 20%/year over the past 5 years, higher than the VNIndex’s 5%/year average over the same period, and the risk-adjusted return ratio has consistently been above 1.5 times since 2019, demonstrating TCAM’s relentless efforts to provide effective investment solutions.
TCAM views the process of accompanying clients in building sustainable prosperity as its guiding principle, therefore, the “win-win” operating mechanism and “putting clients’ interests at the core” are the fundamental ethical principles that help TCAM always gain the trust of clients. With the goal of safety, efficiency, sustainability and professional operation, TCAM is confident that it will successfully fulfill its mission of bringing sustainable prosperity to clients, employees, partners, and contributing to the overall prosperity of the community and society.
Thank you very much!
