Christopher Johnson: Welcome to Morningstar. Today, I’m joined by Ngo Thanh Thao, Deputy Portfolio Manager of the Vietnam Enterprise Investment Trust (VEIL). Let’s dive in. Over one year, your investment trust achieved a 0.9% return rate underperforming its peer benchmark. What do you put this down to?

Ngo Thanh Thao: We have a quite positive return in the first two months of 2024 with the NAV increase by more than 3%. However, our one-year return is still impacted by some lags in last year’s 2023. As you may consider, 2023 was a tough year not only for Vietnam but also in terms of global economy. So, with the Fed rising rate, the geopolitics tension, and also the weakening in domestic demand has also impacted the business performance of the companies in Vietnam. Therefore, some sectors like, especially the retail sectors, have seen a very tough condition last year due to the slowdown in the consumption demand. Our two key holdings in this sector are Mobile World and PNJ has faced a slowdown last year and the share price was underperforming the benchmark. This mainly explains the 0.9% underperformance of the fund.

However, we do believe that the earnings of these two companies and also the retail sector will rebound in 2024, firstly, due to the low base effect for last year and secondly, it’s also driven by the growth in the consumption and also the increase in the public investment in Vietnam. Currently now, the interest rate in Vietnam is low, even, lower than the pre-COVID level. So, with the low interest rate in the environment and also with the strong determination of the Vietnam government to deliver the economic growth this year, we think the retail sector will recover.

CJ: You mentioned Mobile World and it makes up 4.67% of the trust. So why are you still backing the retail chain? You mentioned that it hasn’t done as well. So why are you still bullish on this stock?

NTT: Mobile World is our top pick in the retail sector. It is the best-in-class management and also leading in the retail transformation in Vietnam. So, after suffering a difficult year in 2023, as I already explained, the company expects to come back strongly this year. Profit will jump hugely and of course it will continue to recover in 2025 and also see a huge jump. The robust business performance is thanks