Strong collecting investment fund

 Dragon Capital's fund has far worse performance than VN-Index , two fund directors have been dismissed

Introduced as an investment fund with a balanced portfolio strategy between stocks and bonds, the DCDS fund is expected to help reduce risks in the stock market. However, so far, Dragon Capital's investment fund has been more volatile and has suffered more losses than VN-Index in 2022. With dismal investment performance, two DCDS fund executives have been dismissed.

Besides, Mr. Tran Le Minh also no longer runs the leading corporate investment fund DC (DCBC); DC Bond Fund (DCBF); DC Fixed Income Increasing Bond Investment Fund (DCIP), DCVFMVN30 ETF and DCVFMVN DIAMOND ETF.

According to the unusual information disclosure of Dragon Capital Vietnam Investment Fund Management Joint Stock Company, Mr. Tran Le Minh and Ms. Luong Thi My Hanh have been dismissed from their positions of DCDS fund managers since September 28, 2022. Instead, Mr. Nguyen Sang Loc (born 1986) and Mr. Bui Minh Long (born 1988) will become the new fund managers.

The departure of the two fund managers comes after the DCDS fund recorded poor performance from the beginning of 2022. As of October 4, this investment fund is losing more than 32% compared to the beginning of the year, while Vietnam -Index fell 27.5%. This is one of the worst performing investment funds in 2022.

Who is the DCDS Fund?

Formerly VF1, DC Dynamic Securities Investment Fund (DCDS) is Vietnam's first public fund established in April 2004, with an initial capital of VND 300 billion.

The investment objective of the DCDS fund is to seek long-term profits through investing in a diversified and balanced portfolio of equity securities, convertible bonds, and debt securities on the Vietnamese market. In the video introducing the fund, Dragon Capital said that the investment strategy will be flexible and proactive with the ratio of 80% stocks and 20% bonds. However, the ratio will be flexible according to market movements and the margin of increase or decrease will be 10%. 

The investment method of DCDS has achieved many successes in the past years, in which the performance exceeded the market during the 2 years of the COVID-19 epidemic.

Achievements of DCDS compared to VN-Index since 2012

Source: Dragon Capital

However, when the market turned to plunge this year, the dynamic investment fund of Dragon Capital also wobbled, even more volatile than the VN-Index . As of October 4, DCDS fund is losing more than 32% in 2022, the loss is heavier than VN-Index 's 27% .

Not only having problems with investment performance, investors also feel annoyed when this investment fund buys/sells too much. In the past 12 months, the asset turnover ratio of DCDS fund is up to 504%. This means that the fund has undergone 5 full portfolio changes in the past 12 months.

In addition, DCDS is a mixed investment fund between stocks and bonds, but focuses nearly 90% of the portfolio on stocks. As at 31/08, most of DCDS's portfolio was in stocks on HOSE (86.7%), while debt securities accounted for 8.9% and cash 3.2%.

With this allocation structure, DCDS is also sensitive to market fluctuations. In fact, DCDS has a Beta coefficient of 1.1, which is more volatile than the market. The average annual volatility of the fund is at 21.6%, while the VN-Index is only 19.3%.

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