Hanoi (VNA) - Investment funds are expected to perform better this year,following the successful 2016, on expectations that more individual investorswill purchase their own investments, reported Dau tu Chung khoan (SecuritiesInvestment) newspaper.

Twofactors that will make investment funds attractive to individual investors thisyear include the trading of some 1,500 companies in the securities market,which will bring investment opportunities to individual investors.

However,that also means individual investors will face risks if they decide to purchaseinvestments on their own, as there are so many options, and investors may notchoose correctly.

Anotherfactor is the profit that an investor can make from entrusting investment fundswith their money.

Individualsare allowed to invest at least 1 million VND (44.4 USD) in an open-end fund andcould have the opportunity to obtain profits that are higher than the market’saverage, as their money will be managed by a professional asset management firmand used to invest in local assets.

Entrustinga professional asset management company will make it easier for individualinvestors to make money from the securities market, rather than dealing with agroup of products and services by themselves.

Accordingto Bao Viet Fund Management Company (BVF), investment funds saw strongincreases in recent years by proving that their investment portfolios wereefficient. This has made investment funds more popular and favoured byinvestors.

BVFreported that there are now 18 open-end funds, including five bond investmentfunds and 10 stock investment funds. The total value of the open-end fundsreached more than 3 trillion VND in 2016, a yearly increase of 41 percent.

AtVietFund Management (VFM), as of the end of 2016, two open-end funds, VF1 andVF4, saw annual growth rates of 19.3 percent and 16.4 percent, and averagegrowth rates of 17.3 percent and 18.3 percent for the last five years,respectively.

AtMB Capital, an investment arm of Military Joint Stock Commercial Bank,investment funds and investment portfolios managed by the company had anaverage growth of nearly 15 percent in 2016.

AtSSI Asset Management Company, open-end fund SSI-SCA has reached a growth rateof 43.4 percent since its founding in September 2014, higher than the growthrate of 9.9 percent for the benchmark VN Index on the HCM Stock Exchange duringthe same period. In 2016, SSI-SCA fund rose 24.1 percent, compared to themarket’s growth of 14.8 percent.

Moreparticipation from institutional investors, such as investment and assetmanagement funds, will help reduce the number of individual investors in thesecurities market and cause the market to operate in a more sustainable manner,according to the Chairman of the HCM Stock Exchange Tran Van Dung.

Theratio of the number of individual investors in the securities market now is 99 percent,and it will be difficult to reduce that ratio in the next three to five years, Dungsaid.

Henoted that there are some solutions that need to be put in place to reduce thatratio.

Firstly,the market must be transparent. Transparency will bring fair investmentopportunities to all investors. Then, individual investors who are not skillfuland professional will entrust professional asset management firms with theirmoney.

Secondly,market regulators need to have comprehensive policies that encourage moreforeign investors to enter Vietnam’s securities market. Those policies includethe lifting of the local market from frontier levels to emerging levels.

Thirdly,the market should develop a system of pension funds and improve the network ofparticipating insurance-finance companies.

“When those three solutions are implemented, theratio of institutional investors in the securities market will increase and themarket will operate more sustainably,” Dung said.-VNA