Vietnam Enterprise Investments Limited (LSE:VEIL) is certainly different. As the name suggests, it focuses on investments in the rapidly-growing economy of Vietnam in Southeast Asia.

While this single-country focus makes it very niche, Vietnam Enterprise has delivered solid performance. It has generated annualised returns of around 11% since listing in 2016, including a 30% jump in the past 12 months.

Looking forward to the next few years, I reckon it could continue compounding returns for shareholders. Here’s why.

Why Vietnam?

Vietnam’s economy has been growing very strongly for many years now, driven by rapid economic development and modernisation. But in Q3 2025, it grew by 8.23%, the fastest quarterly pace in over a decade (excluding the post-Covid rebound). 

This established Vietnam as the fastest-growing economy in Southeast Asia for the period. And full-year growth is projected to be around 8%, which is remarkable considering all the uncertainty and disruption caused by President Trump’s tariffs. 

That said, the IMF projects growth slowing to around 6% to 6.5% next year due to US tariffs. Still, that’s very strong, making Vietnam an attractive investment proposition, in my opinion. 

Also, in October 2025, FTSE Russell officially reclassified Vietnam as a ‘Secondary Emerging Market’. It will be officially added to the FTSE Emerging Index next year, ending Vietnam’s status as a frontier market. 

Over the next few years then, this should see a significant amount of capital flow into the Vietnamese stock market. The trust says achieving emerging market status places Vietnam “firmly on the global stage, giving it access to larger institutional investors“.

Why this trust?

The trust manages a portfolio of around 48 Vietnamese stocks worth roughly £1.45bn. It pursues a ‘barbell’ strategy of “concentrating on high-conviction blue chips while incubating smaller growth names…that capture emerging opportunities in Vietnam’s economy”. 

The blue chips include banks and property firms while the growth businesses are ones the managers believe could become tomorrow’s domestic market leaders (pharmaceutical firms and brokerages, for example). 

Despite the strong 12-month performance, the stock still trades at a 13% discount to its net asset value (NAV). However, the gap has been narrowing, suggesting increasing investor confidence in the trust’s prospects. 

Top 5 holdings:

Risks to bear in mind

One risk I see here is that the portfolio is heavily exposed to Vietnamese real estate and banks. While these sectors should naturally continue to benefit from the booming economy, they also might run into trouble at some point (as happened with China’s property market).

Also, the fund’s holdings are priced in Vietnamese dong but its portfolio is valued and reported in US dollars (and UK investors will buy shares in pounds). So currency fluctuations can negatively or positively impact performance.

Vietnam is only getting stronger

We remain optimistic heading into 2026, supported by healthy bank fundamentals, strong housing demand, and Vietnam’s advancing reform and capital-market momentum.
Vietnam Enterprise Investments Limited

On balance though, I view this FTSE 250 trust as an excellent way to consider getting Vietnam exposure.

The country is no longer just doing cheap manufacturing (shoes, garments, etc). It’s increasingly capturing high-value electronics and technology sectors that China is losing due to pricing or trade tensions.

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Crunching the numbers

Take Vietnam as an example. America’s claiming that the average tariff charged by the South-East Asian country — including “currency manipulation and trade barriers” — is 90%. In fact, little science went into this calculation.

As the table below shows, it simply reflects the large trade surplus that Vietnam has with the US.

Indeed, the Office of the United States Trade Representative admits: “The majority of US exports to Vietnam face tariffs of 15 percent or less”.

Leaving aside the rights and wrongs of what’s going on at the moment, this got me thinking about whether there’s an opportunity here. Unsurprisingly, stocks with an exposure to Vietnam have been badly hit. Could now be a good time for growth investors to take advantage of falling valuations?

Let’s take a look.

Something to consider

Vietnam Enterprise Investments (LSE:VEIL) is a FTSE 250 investment trust that takes positions in listed and pre-IPO companies with “attractive growth and value metrics”. Its latest (at close of business 24 April) net asset value (NAV) per share is 656p. This represents a significant 20.7% discount to its share price.

Some of this probably reflects the fact that it’s difficult to value unquoted companies. But I also think it’s a sign of concerns that the country might be badly affected by a trade war. Towards the end of 2022, there was no discount.

The trust has a good track record. Over the past 10 years, it’s delivered an annualised 8.3% increase in its NAV. And since April 2020, its share price has risen over 30%. But over the past three weeks, it’s down 12%.

Interestingly, for a country that has a reputation for manufacturing cheap goods, the trust’s biggest exposure is to the financial services sector.

The World Bank’s latest forecast is predicting Vietnam’s Gross Domestic Product to grow by 6.8% in 2025, and 6.5% in 2026. But these estimates were prepared before Liberation Day and therefore need to be treated with some caution. Dragon Capital, the fund’s manager, described the tariffs as “painful” and estimates a negative 1.4%-2% hit to growth.

However, it said: “The relative impact – when viewed against Vietnam’s proactive diplomacy, ongoing structural reforms, and regional cost advantages – is likely manageable”.

Final thoughts

Personally, I don’t think any country will win in a trade war, including the US. For this reason, I suspect President Trump will reduce the ‘reciprocal’ 46% tariff on Vietnam once he’s able to claim some concessions. If I’m right, the events of the past few weeks could become a distant memory.

With its open economy, stable government and young workforce, Vietnam pitches itself as an alternative to China. The country’s worked hard to create a pro-growth business environment, which should help its biggest and best companies prosper.

For these reasons, investors could consider taking a position in Vietnam Enterprise Investments.

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Here, I’ll consider two FTSE 250 trusts that look like smart buys for my portfolio right now.

Scottish American Investment Company

First up, we have Scottish American Investment Company (LSE: SAIN). This is run by Baillie Gifford and aims to provide both income and capital growth.

Launched in 1873, Saints (as it’s known) currently has 62 shares in its portfolio, as well as bonds and property. The emphasis is on steady earnings growth and dependability.

The dividend yield is fairly low at 2.8%. However, over the last 10 years, the dividend’s increased at a rate of 3.3% a year, above the rate of inflation (2.9% a year).

The top two holdings are Novo Nordisk, which is profiting handsomely from its obesity and diabetes drugs Wegovy and Ozempic, and Microsoft, the part-owner of ChatGPT parent OpenAI.

These are world-class companies with strong balance sheets, so I’d expect both to pay rising dividends for a long time.

Now, one issue here is the trust’s share price returns have lagged the FTSE All-World Index (its benchmark) for a number of years. Property hasn’t kept pace with equities while Saints hasn’t owned the likes of Amazon, Alphabet and Tesla. None pay dividends.

Further underperformance can’t be ruled out. That said, the £1bn trust has raised its dividend for 50 consecutive years and hasn’t cut it since the Second World War. Meanwhile, the shares are trading at a 10.1% discount.

Vietnam Enterprise Investments

Next is Vietnam Enterprise Investments (LSE: VEIL). Managed by Dragon Capital Management, this £1.4bn trust is more of a high-risk, high-reward investment as it’s focused entirely on long-term opportunities in Vietnam.

If anything goes wrong with its political system or economy, the shares could get punished.

Nevertheless, I’m optimistic about the country’s future. Foreign investment’s flooding in as companies relocate manufacturing away from China to Vietnam.

According to Statista, the nation’s gross domestic product (GDP) amounted to around $406bn in 2022, and is expected to increase to $657bn by 2028.

The demographics are also favourable, with a large, skilled labour force supported by a young and growing population. And the thriving economy is creating an expanding consumer base.

Vietnam Enterprise’s share price is up 37% over the last five years, but is down 22% since late 2021.

The top holdings aren’t well known, but that’s the point. I’d be investing to get exposure to economic growth via this portfolio.

Top 5 holdings (as of 14 March)

One gripe I have here is the 1.9% ongoing charge, which is quite high. However, the shares are trading at a 17.3% discount to NAV, so I think this one still looks very attractive.

Foolish takeaway

Finally, NAV discounts (or premiums) simply reflect prevailing market sentiment and investor demand. And this has been improving lately, meaning these sizeable discounts might not last for too much longer.

Therefore, I plan to top up my Saints holding and invest in Vietnam Enterprise with spare cash in April.

The post 2 top FTSE 250 investment trusts trading at attractive discounts! appeared first on The Motley Fool UK.

The Vietnamese economy has been growing rapidly over the last few years, and a number of multinational organisations have recently established manufacturing operations there. According to a recent CNBC news article, Vietnam is likely to be Asia’s top performing economy of 2020 – beating even China!

The country also has trading relations with both China and the West, and talk recently has been of trying to increase these ties, especially with the West. The Vietnamese government are said to be targeting annual GDP growth of at least 6.5% per year for the next few years.

Government elections have recently been held, and the existing Communist Party leader has been re-elected – a man who appears to have a more global outlook in terms of trade. Therefore I hope this will help to continue to bring stability to the country.

One way of getting in on any future potential growth could be by investing in the close-ended fund of Vietnam Enterprise Investments Limited (LSE:VEIL) by Dragon Capital. This fund invests in a number of both listed and pre-IPO companies in Vietnam, with sectors including banks and real estate.

I believe it offers a chance to invest in an emerging market with a lot of potential. I am not the only one who thinks this way: some of the significant shareholders in the fund include the Bill and Melinda Gates Foundation and the City of London Investment Management Company, along with a number of other trusts and funds.

It has recently been trading with a discount to the net asset value, while the fund can also be held as part of a Stocks and Shares ISA.

What are the potential risks and downsides?

Investing in emerging markets can sometimes be a bit of a roller-coaster, and although the Vietnamese government is more stable than some in the region, things can sometimes change. However, the potential rewards could be great if the recent economic growth were to continue.

I am also not thrilled about the 2% management fee that is charged, which is fairly high compared to other trusts and funds. However, this may be in part a result of not having a great deal of competition with similar funds (at least those available on the FTSE) that are invested wholly in the region.

Taking all into consideration, I think that if one is able to accept a certain amount of risk versus potential reward that exists with emerging markets, then I do believe this fund makes for a good addition as a small part of my diverse portfolio.

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