You are on page 1of 19

Annual Report for the year ended 31 December 2016

Investment Company in accordance with Part I of the Luxembourg Law of 17 December 2010 in it´s current
version on Undertakings for Collective Investment in the legal form of a Société d’Investissement à Capital
Variable (SICAV)
R.C.S. Luxembourg B 187 013

R.C.S. Luxembourg B 82183


Table of Content
Fund Manager’s Report Page 2
Geographic classification and economic classification Page 3
Statement of net assets Page 4
Statement of operations Page 6
Statement of investments as at 31 December 2016 Page 7
Purchases and sales from 1 January 2016 - 31 December 2016 Page 9
Notes to the financial statements as at 31 December 2016 Page 10
Report of the Réviseur d’Entreprises agréé Page 15
Management, distribution and advisory Page 16

The sales prospectus including the Articles of Association, the Key Investor Information Document and the Investment Company’s
annual report and semi-annual reports are available free of charge by post, fax or e-mail at the registered office of the Investment
Company, depositary, paying agents or distributors in the respective countries of distribution. Additional information are available at
the Investment Company at all times during regular business hours.
Shares subscriptions are valid only if they are made on the basis of the most recent version of the sales prospectus (including its
appendices) in conjunction with the latest available annual report and any subsequent semi-annual report.

1
Fund Manager’s Report
Fund Manager’s report for Vietnam Emerging Market Fund SICAV
As of 31 December 2016, the market (as measured by the VN-Index) closed at 664.87 points (last availbale price as of 30 December 2016),
up 18.1% YoY in Euro term, in which 2.8% was contributed by the Euro’s devaluation against the Vietnamese Dong. During an
eventful 2016 with Brexit vote, Trump election victory, Fed rate hike, etc., the VN-Index generally moved in an uptrend in most of the
year thanks to the strong recovery of Oil & Gas sector in the first half and positive macro-economic figures of Vietnam’s economy. A
listing wind of some big firms such as Sabeco (SAB), Habeco (BHN), and Airports Corporation of Vietnam (ACV) in the last quarter
also helped to increase the market size and liquidity. Total market cap for the HSX, the HNX and the UpCoM significantly jumped to
USD83 billion at the end of 2016 from USD59 billion recorded at the end of 2015. In addition, combined average daily trading value
for the three markets reached nearly USD140 million in 2016 vs. approximately USD100 million in 2015.
In the review period, the return of Class A, Class B and Class C (launched in August 2016) of the Fund was +16.3%, +15.4%, and
-2.5%, respectively. Both Class A and Class B slightly underperformed the VN-Index due largely to the Fund’s underweighting of F&B
and retail stocks when 2 leaders (VNM and MWG) in these sectors rallied strongly by 24.6% and 96.2%, respectively in 2016. Besides,
it should be noted that Y2016 performance of the VN-Index was remarkably impacted by (i) an outlier, ROS (~$2.3bn market cap)
as it jumped 810% since its listing in September 2016; and (ii) Sabeco (~$5.5bn market cap), which advanced 79.7% after its listing
on 6th December 2016 though liquidity was very thin. Having said that, the Fund (as measured by Class A) strongly outperformed
the Van Eck Market Vectors Vietnam ETF by 24.03% and the DB x-trackers FTSE Vietnam UCITS ETF by 14.96% (all in Euro
term) in the period. Pharmaceutical sector was the biggest contributor to the Fund performance with Traphaco (TRA) – the leading
1)
oriental-medicine manufacturer, increasing 103.1% as it recorded strong profit growth thanks to the restructuring of its distribution
1)
network. The second contributor to the Fund performance was Hoa Sen Group (HSG, +158.8% ) - the leading steel sheet maker,
as it benefited from low input cost, wide distribution network and much higher production capability. On the flipside, some Oil & Gas
1)
and construction material holdings dropped from -7,6% to -17.4% affecting the portfolio.
On the macro, Vietnam successfully achieved most major macroeconomic targets in 2016. Though 6.2% GDP growth was lower than
the government’s initial target of 6.7%, it was still among the highest globally. The country’s growth engines kept doing well on the
back of its stable macro-economic environment. FDI disbursements increased 9%YoY to USD15.8 billion – the highest figure ever
recorded, supporting exports and leading to a trade surplus of USD2.86 billion vs. a deficit of USD3.5 billion in 2015. Retail sales
of goods and services were up 10.2% YoY vs. 9.8% in 2015, indicating a resilient domestic consumption. The manufacturing and
processing sector consequently grew 11.2%YoY while Vietnam PMI in December read at 52.4 points – the 13th consecutive month
of expansion albeit global slowing demand. Meanwhile, after being kept below 1% last year, inflation picked up to +4.74% YoY in
2016, in line with the official target of below 5%. On currency front, amidst a volatile year for currencies, the Vietnamese Dong (VND)
was kept relatively stable against the US dollar when the VND only lost 1.2% for FY2016. This was thanks to US dollar inflows from
FDI, other foreign capital inflows from private placements, the trade surplus, all of which helped the State Bank of Vietnam to build
up the foreign reserves to the record high of USD41 billion at the year-end.
Looking into 2017, with recovering oil price and improving weather conditions, the Government’s GDP target of 6.7% for 2017 would
not be out of reach. However, inflation needs a continued watch given rising prices of global commodities and domestic goods and
services, as well as possible further depreciation of the VND. The Government targets to keep inflation in 2017 at the same level of 2016,
i.e around 5%. Another point to watch is the currency. Likely Fed’s rate hike(s) in 2017 and thus possible further strengthening of
US dollar could stir Vietnam forex market. However, the current healthy foreign reserves and US dollar inflows should facilitate the State
Bank’s job in maintaining the FX rate within a controllable range. On the market side, coming listings of big companies (Vietnam Airlines,
Massan Consumer, FPT Telecom, Novaland, Vietjet, etc.), a busy IPO pipeline (Mobifone, VNPT, Vinacafe, Vinataba, Vinachem, etc.),
state divestments and launching of derivatives are expected to offer more investment opportunities to investors and increase liquidity
in 2017. Overall, we keep a positive view on the economy and the stock market in the coming year.
The Fund’s performance versus VN-Index (in EUR and USD terms) during the review period (as of 31 December 2016):

Change (%)
NAV/ Total NAV
Share (mn) 1M 3M 6M 1Y 2Y Inception
Class A (EUR) 1202.7 18.3 0.2 -3.4 2.7 16.3 14.6 20.3
VN-Index (EUR) 2.5 1.9 9.8 19.2 37.4 41.8
Class B (EUR) 1171.4 0.8 0.1 -3.7 2.3 15.4 13.4 17.1
VN-Index (EUR) 2.5 1.9 9.8 19.2 37.4 33.8
Class C (USD) 975.1 0.4 -1.2 -9.6 - - - -2.5
VN-Index (USD) 0.8 -5.3 - - - 3.5
Note: Due to the change of the Fund‘s NAV calculation method (change of the pricing policy from T to T-1) applied from April 2016,
the VN-Index in the table was taken on T-1 day to have an accurate comparison with the Fund’s performance.

Luxembourg, January 2017 The Board of Directors of Vietnam Emerging Market Fund SICAV
1)
Calculated under consideration of all corporate actions which took place in 2016.

The information and figures provided in this report are based on past performance and are not an indication for future results.

2
Annual report
1 January 2016 - 31 December 2016

The company is entitled to create share classes with different rights.


The following share classes currently exist with the following features:

1)
Share class A Share class B Share class C
Securitiy No.: A1XE8U A1XE8V A14RPQ
ISIN: LU1042536018 LU1042536281 LU1218444351
Subscription fee: none up to 1.50 % none
Redemption fee: none none none
Management fee: up to 1.62 % p.a. plus up to 2.12 % p.a. plus up to 1.62 % p.a. plus
1,000.00 EUR fixed 1,000.00 EUR fixed 1,000.00 EUR fixed
fee p.m. for the fund fee p.m. for the fund fee p.m. for the fund
Minimum subsequent 100,000.00 EUR 1,000.00 EUR 100,000.00 USD
investment:
Use of income: accumulative accumulative accumulative
Currency: EUR EUR USD
1)
The net asset value of share class C was calculated for the first time on 5 August 2016.

2)
Geographic classification
Vietnam 96.09 %
Investment in securities 96.09 %
Cash at bank 5.43 %
Balance of other receivables and liabilities -1.52 %
100.00 %

2)
Economic classification
Raw, auxiliary & operating materials 19.46 %
Capital Goods 16.20 %
Public utilities 11.70 %
Pharmaceuticals, Biotechnology & Life Sciences 10.15 %
Real Estate 8.88 %
Transportation 7.88 %
Banks 6.56 %
Energy 6.00 %
Insurance 4.85 %
Food, Beverage & Tobacco 4.41 %
Investment in securities 96.09 %
Cash at bank 5.43 %
Balance of other receivables and liabilities -1.52 %
100.00 %
2)
Deviations in the totals are due to rounding differences.

The accompanying notes form an integral part of these financial statements.

3
Performance over the past 3 financial years
Share class A
Date Total Shares Net cash inflow Net asset value
net assets outstanding in thousands EUR per share
in millions EUR EUR
31.12.2014 10.53 10,034 10,186.36 1,049.69
31.12.2015 15.50 14,988 6,035.53 1,033.96
31.12.2016 18.29 15,209 281.43 1,202.69

Share class B
Date Total Shares Net cash inflow Net asset value
net assets outstanding in thousands EUR per share
in millions EUR EUR
31.12.2014 0.31 297 335.23 1,032.76
31.12.2015 0.60 589 321.08 1,014.98
31.12.2016 0.77 658 102.38 1,171.35

Performance since launch


Share class C
Date Total Shares Net cash inflow Net asset value Net asset value
net assets outstanding in thousands EUR per share per share
in millions EUR EUR USD
1) 2)
08.05.2014 Launch - - 897.91 1,000.00
3)
31.12.2016 0.42 455 412.94 929.70 975.07
1)
The net asset value of share class C was calculated for the first time on 5 August 2016.
2)
conversion into Euro as at 5 August 2016 1 EUR = 1.1137 USD
3)
conversion into Euro as at 31 December 2016 1 EUR = 1.0488 USD

Statement of net assets


as at 31 December 2016
EUR
Investments in securities at market value 18,719,642.63
(Cost of investments: EUR 15,392,200.40)
Cash at bank 1,057,954.36
Dividend receivable 82,323.32
4)
Other assets 12,601.24
19,872,521.55

Interest payable -376.25


5)
Other liabilities -387,017.05
-387,393.30
Total net assets 19,485,128.25

4)
The position includes amortisation of formation expenses.
5)
This position consists primarily of management fees payables and performance fee payables.

The accompanying notes form an integral part of these financial statements.

4
Allocations by share class
Share class A
Proportion of total net assets 18,291,697.80 EUR
Number of shares outstanding 15,209.000
Net asset value per share 1,202.69 EUR

Share class B
Proportion of total net assets 770,877.99 EUR
Number of shares outstanding 658.111
Net asset value per share 1,171.35 EUR

Share class C
Proportion of total net assets 422,552.46 EUR
Number of shares outstanding 454.502
Net asset value per share 929.70 EUR
1)
Net asset value per share 975.07 USD
1)
conversion into Euro as at 31 December 2016 1 EUR = 1.0488 USD

Statement of changes in total net assets


for the reporting period from 1 January 2016 to 31 December 2016
Total Share class A Share class B Share class C
EUR EUR EUR EUR
Total net assets at the beginning of the reporting period 16,095,106.36 15,497,065.27 598,041.09 0.00
Net gain/loss -32,716.20 -27,254.81 -6,951.14 1,489.75
Income equalisation 5,787.96 2,971.59 2,696.21 120.16
Cash inflows from subscriptions 1,520,001.47 751,936.41 355,128.79 412,936.27
Cash outflows from redemptions -723,257.38 -470,505.00 -252,752.38 0.00
Realised gains 751,957.21 720,665.99 25,882.03 5,409.19
Realised losses -2,355,685.50 -2,266,711.06 -88,943.10 -31.34
Net change in unrealised appreciation on investments 4,223,934.33 4,083,529.41 137,776.49 2,628.43
Total net assets at the end of the reporting period 19,485,128.25 18,291,697.80 770,877.99 422,552.46

Statement of changes in the number of shares


Share class A Share class B Share class C
No. of shares No. of shares No. of shares
Shares outstanding at the beginning of the reporting period 14,988.000 589.217 0.000
Shares subscribed 721.000 305.505 454.502
Shares redeemed -500.000 -236.611 0.000
Shares outstanding at the end of reporting period 15,209.000 658.111 454.502

The accompanying notes form an integral part of these financial statements.

5
Statement of operations
for the reporting period from 1 January 2016 to 31 December 2016
Total Share class A Share class B Share class C
EUR EUR EUR EUR

Income
Dividend income 748,899.79 719,194.30 23,716.65 5,988.84
Bank interest -426.91 -410.96 -13.64 -2.31
Income equalisation 15,018.65 7,959.45 7,059.13 0.07
Total income 763,491.53 726,742.79 30,762.14 5,986.60

Expense
Interest expense -119.98 -108.83 -4.28 -6.87
Performance fee -340,114.66 -330,396.31 -9,718.35 0.00
Management and investment adviser fee -298,864.85 -281,799.38 -13,794.31 -3,271.16
Depositary fee -18,085.36 -17,334.12 -596.98 -154.26
Central Administration Agent fee -22,659.99 -21,713.18 -749.19 -197.62
Taxe d’abonnement -9,046.94 -8,662.34 -299.54 -85.06
Publishing and auditing expense -28,326.94 -27,262.15 -884.98 -179.81
Setting, printing and shipping expense for annual and -5,524.89 -5,361.74 -161.35 -1.80
semi-annual reports
Transfer agent fee -4,725.02 -4,527.16 -155.85 -42.01
Government fee -3,656.61 -3,513.60 -132.08 -10.93
Formation expense -5,079.36 -4,868.18 -167.80 -43.38
1)
Other expense -39,196.52 -37,519.57 -1,293.23 -383.72
Income equalisation -20,806.61 -10,931.04 -9,755.34 -120.23
Total expense -796,207.73 -753,997.60 -37,713.28 -4,496.85
Ordinary net income -32,716.20 -27,254.81 -6,951.14 1,489.75

2)
Total transaction costs in the reporting period 41,665.56

2) 3)
Total expense ratio as a percentage 2.46 3.13 1.06

2)
Performance fee as a percentage 1.97 1.67 -
1)
This position consists primarily of delivery charges and depositary fees.
2)
See accompanying notes to this report.
3)
For the period from 8 August 2016 to 31 December 2016.

The accompanying notes form an integral part of these financial statements.

6
Statement of investments as at 31 December 2016
1)
ISIN Securities Purchases Sales Quantity Price Market value % TNA
EUR

Shares, rights and participation certificates


Transferable securities admitted to an official exchange listing
Vietnam
VN000000BVH3 Baoviet Holdings VND 0 262,330 385,370 58,600.0000 945,336.26 4.85
VN000000BMP5 Binh Minh Plastics JSC VND 0 0 4 192,900.0000 32.30 0.00
VN000000CTD4 Coteccons Construction JSC VND 50,220 14,000 124,880 179,900.0000 940,448.14 4.83
VN000000DRC8 Danang Rubber JSC VND 291,994 23,400 693,874 31,000.0000 900,436.53 4.62
VN000000DHG0 DHG Pharmaceutical JSC VND 0 0 45,853 97,200.0000 186,571.29 0.96
VN000000DQC0 DienQuang Lamp JSC VND 287,925 7,000 280,925 61,500.0000 723,229.79 3.71
VN000000DVP2 Dinh Vu Port Inv.and Dev.JSC VND 24,570 32,000 294,730 71,800.0000 885,848.77 4.55
VN000000HAH4 Hai An Transport+Stevedoring VND 398,320 0 398,320 38,900.0000 648,623.25 3.33
VN000000HT12 Hatien 1 Cement Joint Stock Co VND 292,694 339,780 932,184 20,800.0000 811,663.06 4.17
VN000000HSG8 Hoa Sen Group VND 883,364 1,115,590 960,212 51,700.0000 2,078,109.71 10.67
VN000000VCB4 JSC Bk f.Forei. Tr. of Vietnam VND 415,369 0 861,219 35,450.0000 1,278,028.80 6.56
VN000000KBC7 Kinh Bac City Development Corporation VND 312,520 438,550 1,377,820 13,800.0000 795,943.74 4.08
VN000000NLG1 Nam Long Investment Corporation VND 268,900 0 1,007,150 22,200.0000 935,961.38 4.80
VN000000PVD2 PetroViet.Drill.+Well Svcs PJC VND 476,300 675,730 476,300 20,200.0000 402,756.68 2.07
VN000000GAS3 PetroVietnam Gas JSC VND 633,170 528,810 552,170 59,700.0000 1,379,932.80 7.08
VN000000PVS0 PetroVietnam Technical Service Corporation VND 1,405,274 2,208,400 1,142,974 16,000.0000 765,538.67 3.93
VN000000PPC6 Pha Lai Thermal Power JSC VND 156,380 0 156,380 16,550.0000 108,340.29 0.56
VN000000SSI1 Saigon Securities Inc. VND 0 0 4 19,700.0000 3.30 0.00
VN000000SJS9 Song Da Urb & Ind.Zone Inv.&D. VND 773,330 0 773,330 24,000.0000 776,938.96 3.99
VN000000TRA8 Traphaco JSC VND 147,130 0 375,130 114,000.0000 1,790,183.08 9.19
VN000000VNM8 Vietnam Dairy Products JSC VND 67,000 61,240 159,760 128,600.0000 860,042.32 4.41
VN000000VSH7 Vinh Son-Song Hinh Hydro Power VND 1,098,420 0 1,235,610 15,300.0000 791,377.40 4.06
18,005,346.52 92.42
Transferable securities admitted to an official exchange listing 18,005,346.52 92.42

Securities listed or included on organised markets


Vietnam
VN000000GEX5 Vietnam Electrical Equipment JSC VND 880,500 85,000 795,500 20,300.0000 676,000.51 3.47
676,000.51 3.47
Securities listed or included on organised markets 676,000.51 3.47

1)
TNA = Total net assets. Deviations in the totals are due to rounding differences.

The accompanying notes form an integral part of these financial statements.

7
Statement of investments as at 31 December 2016
1)
ISIN Securities Purchases Sales Quantity Price Market value % TNA
EUR

Unquoted securities
Vietnam
VNMIRGEX1616 Vietnam Electrical Equipment JSC BZR VND 795,500 0 795,500 1,150.0000 38,295.60 0.20
20.12.16
38,295.60 0.20
Unquoted securities 38,295.60 0.20
Shares, rights and participation certificates 18,719,642.63 96.09
Investment in securities 18,719,642.63 96.09
Cash at bank - current accounts 1,057,954.36 5.43
Balance of other receivables and liabilities -292,468.74 -1.52
Total net assets in EUR 19,485,128.25 100.00

1)
TNA = Total net assets. Deviations in the totals are due to rounding differences.

The accompanying notes form an integral part of these financial statements.

8
Purchases and sales from 1 January 2016 to 31 December 2016
Purchases and sales of securities, bonded loans and derivatives during the reporting period, including changes without cash flows, which were not stated in the statement
of investments.

ISIN Securities Purchases Sales

Shares, rights and participation certificates


Transferable securities admitted to an official exchange listing
Vietnam
VN000000DXG7 Dat Xanh Real Est.Ser.a.Co.JSC VND 0 997,520
VN000000HVG2 Hung Vuong Corporation VND 149,220 1,094,560
VN000000DPM1 Petrovietnam Fer.a.Chem.J.S.Co VND 0 597,330
VN000000TDH3 Thu Duc Housing Development Corporation VND 0 164,336
VN000000TTF3 Truong Thanh Furniture Corporation VND 234,840 234,840

Exchange rates
For the valuation of assets in foreign currencies, conversions into Euro were performed using the following exchange rates as at 31 December 2016.
US Dollar USD 1 1.0488
Vietnam Dong VND 1 23,888.5176

The accompanying notes form an integral part of these financial statements.

9
Notes to the financial statements
as at December 31, 2016
1.) GENERAL
The Investment Company is a Luxembourg investment company (Société d’Investissement à Capital Variable) that has been
established for an unlimited period in the form of a single fund (“Investment Company”) in accordance with Part I of the Luxembourg
Law of 17 December 2010 on Undertakings for Collective Investment (the “Law of 17 December 2010”).
The Investment Company is a limited company with variable capital (Société d’Investissement à Capital Variable), under Luxembourg
law with its registered office at 4, rue Thomas Edison, L-1445 Strassen, Luxemburg. It was formed on 8 May 2014 at the initiative of the
Vietnam Asset Management Ltd. for an unlimited period. Its Articles of Association were published on 30 May 2014 in the Mémorial,
Recueil des Sociétés et Associations, the official journal of the Grand Duchy of Luxembourg (“Mémorial”). The Mémorial was
replaced on 1 June 2016 by the new information platform Recueil Électronique des Sociétés et Associations (“RESA”) of the Trade
and Companies Register in Luxembourg. The Investment Company is entered in the commercial register in Luxembourg under
registration number R.C.S. Luxembourg B187013. The latest amendmant to the Articles of Association of the Investment Company
came into effect on 13 October 2016 and were published in the RESA.
The Board of Directors of the Investment Company appointed the Management Company IPConcept (Luxemburg) S.A., a public
limited company (Aktiengesellschaft) under the law of the Grand Duchy of Luxembourg with its registered office located at
4, rue Thomas Edison, L-1445 Strassen, Luxemburg, with the duties of asset management, administration and distribution of
the shares of the Investment Company. The Management Company was incorporated for an unlimited period on 23 May 2001.
Its Articles of Association were published in the Mémorial on 19 June 2001. The latest amendment to the Articles of Association
of the Management Company came into effect on 12 October 2016 and were published in the RESA on 10 November 2016. The
Management Company is listed in the commercial register in Luxembourg under registration number R.C.S. Luxembourg B 82.183.

2.) SIGNIFICANT ACCOUNTING AND VALUATION POLICIES; CALCULATION OF THE NET ASSET VALUE
These financial statements are drawn up at the responsibility of the Board of Directors of the Investment Company in accordance
with the legal provisions applicable in Luxembourg and the standards for the preparation and presentation of financial statements.
1. The net assets of the Investment Company are shown in euro (EUR) (“reference currency”).
2. The value of a share (“net asset value per share”) is denominated in the currency laid down in the Annex to the sales prospectus
(“fund currency”), unless any other currency is stipulated for any other share classes in the Annex to the sales prospectus (“share
class currency”).
3. The net asset value per share is calculated by the Investment Company or a third party commissioned for this purpose by the
Investment Company, under the supervision of the Depositary Bank, on each banking day in Luxembourg, with the exception of
24 and 31 December of each year (“valuation day”). The Board of Directors may decide to apply different regulations to individual
funds, but the net asset value per share must be calculated at least twice each month.
4. In order to calculate the net asset value per share, the value of the assets of the fund, less the liabilities of the fund (“total net
assets”) is determined on each valuation day and this is divided by the number of shares outstanding on the valuation day. The
Management Company can, however, decide to determine the net asset per share on the 24 and 31 December of a year without
these determinations of value being calculations of the net asset per share on a valuation day within the meaning of the above
clause 1 of this point 4. Consequently, the shareholders may not demand the issue, redemption or exchange of shares on the
basis of a net asset value determined on 24 December and/or 31 December of a year.
5. Insofar as information on the situation of the net assets of the company must be specified in the annual or semi-annual report
and/or other financial statistics pursuant to the applicable legislative provisions or in accordance with the conditions of these
Articles of Association, the value of the assets of the fund will be converted to the reference currency. The fund‘s net assets will
be calculated according to the following principles:
a) Securities, money market instruments, derivative financial instruments (derivatives) and other assets officially listed on a
stock exchange are valued at the latest available trade price which provides a reliable valuation on the trading day preceding
the valuation day.
The Management Company may stipulate for the fund that transferable securities, money market instruments, derivative
financial instruments (derivatives) and other assets officially listed on a securities exchange are valued at the latest available
closing price which provides a reliable valuation.
Details on this can be found in the Annex to the sales prospectus of the fund.
If transferable securities, money market instruments, derivative financial instruments (derivatives) and other assets are
officially listed on several stock exchanges, the one with the highest liquidity shall be decisive.
b) Securities not officially listed on a securities exchange but traded on a regulated market will be valued at a price that may
not be lower than the bid price and not higher than the offered price of the trading day preceding the valuation day and which
the Investment Company deems in good faith to be the best possible price at which the securities can be sold.

10
Notes to the financial statements
as at December 31, 2016
The Management Company may, on behalf of the fund, determine that transferable securities, money market instruments,
derivative financial instruments (derivatives) and other assets which are not officially listed on a securities exchange (or whose
stock exchange rate is not deemed representative, e.g. due to lack of liquidity) but which are traded on another regulated
market, shall be valued at the latest available price there, and which the Management Company considers in good faith
to be the best possible price at which the transferable securities, money market instruments, derivative financial instruments
(derivatives) and other investments can be sold. Details on this can be found in the Annex to the sales prospectus of the fund.
c) OTC derivatives shall be evaluated on a daily basis using a method to be determined and validated by the Investment
Company in good faith on the basis of the sale value that is likely attainable and using generally accepted valuation models
which can be verified by an auditor.
d) UCITS and UCIs are valuated at the most recently established and available redemption price. In the event that the redemption
of the investment units is suspended, or no redemption prices are established, these units together with all other assets will
be valued at their appropriate market value, as determined in good faith by the Management Company and in accordance
with generally accepted valuation standards approved by the auditors.
e) If the prices in question are not fair market prices, if the financial instruments under (b) are not traded on a regulated market,
and if no prices are set for financial instruments different from those listed under (a)–(d), then these financial instruments
and the other legally permissible assets shall be valued at their current market value, which shall be established in good
faith by the Management Company on the basis of generally accepted and verifiable valuation rules (e.g. suitable valuation
models taking account of current market conditions).
f) Cash and cash equivalents are valued at their nominal value plus interest.
g) Amounts due (e.g. deferred interest claims and liabilities) shall, in principle, be rated at their nominal value.
h) The market value of securities and other investments which are denominated in a currency other than the currency of the
fund shall be converted into the currency of the fund at the exchange rate of the trading day preceding the valuation day,
using WM/Reuters fixing at 17:00 (16:00 GMT). Gains and losses from foreign exchange transactions will on each occasion
be added or subtracted.
Any distributions paid out to fund shareholders will be deducted from the net assets of the fund. The Management Company may
stipulate for the funds that the transferable securities, money market instruments, derivative financial instruments (derivatives)
and other assets denominated in a currency other than that of the sub-fund shall be converted into the sub-fund currency at the
exchange rate of the trading day. Profits and losses from foreign exchange transactions shall, on each occasion, be added or
subtracted. Details on this can be found in the Annexes to the relevant sub-funds.
6. The net asset value per share is calculated separately for the Investment Company pursuant to the aforementioned criteria.
However, if there are different share classes within the Investment Company, the net asset value per share will be calculated
separately for each share class within this Investment Company subject to the aforementioned criteria.
The tables published in this report may, for arithmetical reasons, contain rounding differences which are higher or lower than a unit
(currency, percentage, etc.).

3.) TAXATION
Taxation of the Investment Company
In the Grand Duchy of Luxembourg, the Investment Company‘s assets are subject to a subscription tax known as the “taxe
d’abonnement”, which is currently levied in an amount of 0.05% p.a. The “taxe d’abonnement” is payable quarterly on the total net
assets reported as at the end of each respective quarter. The amount of the “taxe d’abonnement” is specified for the fund or share
classes in the relevant Annex to the sales prospectus. If the fund assets are invested in other Luxembourg investment funds that are
already subject to the taxe d’abonnement, said assets invested in such funds are exempt from the tax.
The income of the Investment Company or the fund from investing its assets is not taxed in the Grand Duchy of Luxembourg. However,
such income may be subject to taxation at source in countries in which the fund assets are invested. In such cases, neither the
depositary bank nor the Investment Company is obliged to collect tax certificates.
Taxation on income from shares of the investment fund for the investor
On 1 January 2015, the agreement of the EU member states on the automatic exchange of information between national tax
authorities, which specifies that all interest payments should be taxed according to the provisions of the country of residence, was
transposed into Luxembourg law in accordance with Directive 2003/48/EC. This renders obsolete the former regulation establishing
a withholding tax (35% of the interest payment) instead of information exchange, which the government of Luxembourg had decided
upon as a temporary solution. Since 1 January 2015, information on the amounts of interest paid by banks in Luxembourg directly
to individuals who are resident in another member state of the European Union were automatically forwarded to the Luxembourg tax
authorities, who informed the tax authority of the country in which the beneficiary is resident. The first exchange of information took
place in 2016 and applied to interest paid during the tax year 2015. As a result, the system of non-recoverable withholding tax of
35% on interest payments was abolished on 1 January 2015.

11
Notes to the financial statements
as at December 31, 2016
Shareholders who are not resident in the Grand Duchy of Luxembourg, or who do not maintain a permanent establishment there, do
not have to pay income, inheritance, or wealth tax on shares or income from shares in the Grand Duchy of Luxembourg. They are
subject to the national tax regulations of their country of residence. Since 1 January 2006, in accordance with the Luxembourg law
implementing the Directive, natural persons who are resident in the Grand Duchy of Luxembourg and who are not resident for tax
purposes in another country have to pay a final withholding tax of 10% on the interest income mentioned in the legislation. Under
certain conditions, this withholding tax may also apply to the interest income of an investment fund. At the same time, the wealth tax
was abolished in the Grand Duchy of Luxembourg.
It is recommended that shareholders ensure they are informed about laws and regulations which apply to the purchase, ownership
and redemption of shares and seek advice if necessary.
Prospective shareholders should ensure they are informed about laws and regulations which apply to the purchase, ownership and
redemption of shares and obtain advice if necessary.
Information for investors liable to taxation in Germany:
The tax rules subject to § 5 section 1 InvStG (Investmentsteuergesetz) are published on www.bundesanzeiger.de under „Kapitalmarkt –
Besteuerungsgrundlagen“ within the publication timeframe required by law.

4.) USE OF INCOME


Further details on the use of income are provided in the sales prospectus.

5.) INFORMATION RELATING TO FEES AND EXPENSES


Please refer to the current sales prospectus for information regarding management and depositary fees.

6.) TOTAL EXPENSE RATIO (TER)


The following calculation method was used to calculate the total expense ratio (TER):
Total expense in fund currency
TER = -------------------------------------------------------------- x 100
Average total net assets (basis: daily TNA*)
* TNA = Total net assets
The TER indicates the level of expenses charged to the fund. It covers management and depositary fees and the “taxe d’abonnement”
as well as all other costs with the exception of transaction costs incurred by the fund. It shows the total amount of these costs as
a percentage of the average total net assets in the reporting period. (Any performance fees are shown separately in direct relation
to the TER.)

7.) TRANSACTION COSTS


Transaction costs include all costs which, during the financial year, were shown or calculated separately on behalf of the Fund and
which are directly connected with the purchase or sale of assets.

8.) INCOME EQUALISATION


The income equalisation is included in the ordinary net income. This covers net income arising during the period under review which
the purchaser of shares pays for as part of the issue price and the seller of shares receives as part of the redemption price.

9.) RISK MANAGEMENT


The Management Company employs a risk management process enabling it to monitor and assess the risk connected with the
investment holdings, as well as their share in the total investment portfolio risk profile of the funds it manages, at all times. In accordance
with the Law of 17 December 2010 and the applicable prudential supervisory requirements of the Commission de Surveillance du
Secteur Financier (“CSSF”), the Management Company reports regularly to the CSSF about the risk management process used.
Within the framework of the risk management process and using the necessary and appropriate methods, the Management Company
ensures that the overall risk associated with derivatives of the funds managed does not go beyond the total net value of their portfolios.
To this end, the Management Company makes use of the following methods:

12
Notes to the financial statements
as at December 31, 2016
Commitment approach
With the commitment approach, the positions from derivative financial instruments are converted into their corresponding underlying
equivalents using the delta approach. In doing so, the netting and hedging effects between derivative financial instruments and their
underlying assets are taken into account. The total of these underlying equivalents may not exceed the net asset value of the Fund.
Value-at-risk (VaR) approach
The value-at-risk (VaR) figure is a mathematical-statistical concept and is used as a standard risk measure in the financial sector.
VaR indicates the possible loss of a portfolio that will not be exceeded during a certain period (the holding period) with a certain
probability (the confidence level).
Relative VaR approach
With the relative VaR approach, the VaR of the Fund must not exceed the VaR of a reference portfolio by more than a factor dependent
on the amount of the Fund‘s risk profile. The maximum permissible factor specified by the supervisory authority is 200%. The reference
portfolio is essentially an accurate reflection of the Fund‘s investment policy.
Absolute VaR approach
With the absolute VaR approach, the VaR (99% confidence level, 20-day holding period) of the Fund may not exceed a portion of the
Fund‘s assets dependent on the Fund‘s risk profile. The maximum permissible factor specified by the supervisory authority is 20%
of the Fund assets. For funds whose total risk associated with derivatives is determined using the VaR approach, the Management
Company estimates the anticipated leverage effect. Depending on the respective market situation, this degree of leverage may
deviate from the actual value and may either exceed or be less than that value. Investors are notified that no conclusions about the
risk content of the Fund may be drawn from this data. In addition, the published expected degree of leverage is explicitly not to be
considered an investment limit.
In accordance with the prospectus valid at the end of the reporting period, the Vietnam Emerging Market Fund SICAV applies the
following risk management procedure:

UCITS Risk-management procedure applied


Vietnam Emerging Market Fund SICAV Relative VaR approach
Relative VaR approach for Vietnam Emerging Market Fund SICAV
The relative VaR approach was used for monitoring and measuring the total risk associated with derivatives during the period from
1 January 2016 until 31 December 2016. The corresponding reference portfolio is composed of 100% Ho Chi Minh Stock Index.
A relative value of 200% of the reference portfolio was applied as the internal upper limit. The VaR utilisation in relation to this
internal upper limit showed a minimum value of 49.29%, a maximum value of 77.53% and an average value of 59.85% during the
corresponding period. The VaR was calculated with a (parametric) variance/co-variance approach using the calculation standards of
a unilateral confidence interval of 99%, a holding period of 20 days and a (historical) reporting period of one year (252 trading days).
Leverage for Vietnam Emerging Market Fund SICAV
The leverage amounted to the following values over the period from 1 January 2016 to 31 December 2016:
Lowest leverage: 0.00%
Highest leverage: 0.00%
Average leverage (median): 0.00% (0.00%)
Calculation method: Nominal value method (sum of notionals)

10.) SIGNIFICANT EVENTS DURING THE REPORTING PERIOD


With effect from 18 March 2016 the following amendments were made to the Articles of Association and the Sales Prospectus of
the Investment Company:
- regulatory amendments with regard to the UCITS V Directive
With effect from 13 October 2016 the following amendments were made to the Articles of Association and the Sales Prospectus of
the Investment Company:
- reduction of the minimum investment in the share classes B and D
- cancellation of the redemption fee in the share classes B and D
- cancellation of the subscription fee in the share classes A and C
- reduction of the subscription fee in the share classes B and D
- regulatory amendments with regard to the UCITS V Directive
- regulatory amendments with regards to the SFTR (Securities Financing Transactions Regulation)
Amendment of the calculation method (change of the pricing policy from T to T-1) as follows:
- Securities of the fund which are officially listed on a stock exchange will be valuated at the last available closing price, which
provides a reliable valuation on the trading day preceding the valuation day.

13
Notes to the financial statements
as at December 31, 2016
- Securities of the fund which are not officially listed on a securities exchange but traded on a regulated market will be valuated at
a price that may not be lower than the bid price and not higher than the offered price of the trading day preceding the valuation
day and which the Investment Company deems in good faith to be the best possible price at which the securities can be sold.
There were no other significant events during the reporting period.

11.) SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD


There were no significant events after the reporting period.

12.) INFORMATION ON THE REMUNERATION POLICY (UNAUDITED)


The management company IPConcept (Luxemburg) S.A. has established a remuneration policy which complies with and applies the
legal requirements. The remuneration policy is designed in such a way that it is reconcilable with solid and effective risk management
and does not encourage employees to take risks that are not reconcilable with the risk profiles, contractual terms or articles of
association of the undertakings for collective investment in securities (hereinafter „UCITS“) under management, or prevent IPConcept
(Luxemburg) S.A. from acting dutifully in the best interest of the UCITS.
Employee remuneration consists of an appropriate fixed annual salary and a variable performance and result-related remuneration.
The remuneration system of DZ PRIVATBANK S.A. applies comprehensively to the employees of the management company.
The members of the Executive Board of IPConcept (Luxemburg) S.A. are subject to the Remuneration policy for Risk Takers of
DZ PRIVATBANK S.A. Further details of the up-to-date remuneration policy, including, but not limited to, a description of how
remuneration and benefits are calculated, the identities of persons responsible for awarding the remuneration and benefits including
the composition of the remuneration committee, where such a committee exists, may be downloaded free of charge from the
Management Company‘s website www.ipconcept.com. A hardcopy will be made available free of charge to investors on request.
The total remuneration of the 53 employees of IPConcept (Luxemburg) S.A. amounted to EUR 3,494,479.66 as at
31 December 2015. The above remuneration figure refers to all the UCITS and alternative investment funds („AIF“) managed by
IPConcept (Luxemburg) S.A.
All employees are involved with the management of all the funds such that it is not possible to show a split per fund.
The IPConcept (Luxemburg) S.A. remuneration policy is currently being adjusted to the remuneration provisions of the Law of
17 December 2010 (in its current form), where necessary. The information is provided on a best efforts basis. Further detailed
information on remuneration can only be provided after IPConcept (Luxemburg) S.A. has completed its first full performance year
after the UCITS-V remuneration provisions become effective (year end of the management company: 31/12.).

13.) TRANSPARENCY OF SECURITIES FINANCING TRANSACTIONS AND THEIR REUSE (UNAUDITED)


IPConcept (Luxemburg) S.A. is acting as a management company of undertakings for collective investment in transferable securities
(“UCITS”) and as alternative investment fund manager (“AIFM”) and thus falls by definition within the scope of Regulation (EU)
2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions
and of reuse and amending Regulation (EU) No 648/2012 (“SFTR”).
During the financial year of the investment company no investments have been undertaken in securities financing transactions or
total return swaps as defined in this regulation. Therefore, the notes specified in Article 13 of this regulation will not be disclosed in
the financial statements. Detailed information on the investment company‘s investment strategy and the financial instruments used
can be found in the current sales prospectus and on the Management Company‘s website (www.ipconcept.com).

14
Report of the Réviseur d’Entreprises agréé
KPMG Luxembourg, Société coopérative Tel.: +352 22 51 51 1
39, Avenue John F. Kennedy FAX: +352 22 51 71
L-1855 Luxembourg E-mail: info@kpmg.lu
Internet: www.kpmg.lu

To the Shareholders of
Vietnam Emerging Market Fund SICAV
4, rue Thomas Edison
L-1445 Strassen, Luxembourg
We have audited the accompanying financial statements of Vietnam Emerging Market Fund SICAV, which comprise the statement of
net assets and the statement of investments and other net assets as at 31 December 2016 and the statement of operations and the
statement of changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory
information.
Board of Directors of the SICAV responsibility for the financial statements
The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance
with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements, and for such internal control
as the Board of Directors of the SICAV determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Responsibility of the Réviseur d’Entreprises agréé
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the judgement of the Réviseur d’Entreprises agréé, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Réviseur
d’Entreprises agréé considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of Vietnam Emerging Market Fund SICAV as
of 31 December 2016, and of the results of its operations and changes in its net assets for the year then ended in accordance with
Luxembourg legal and regulatory requirements relating to the preparation of the financial statements.
Other information
The Board of Directors of the SICAV is responsible for the other information. The other information comprises the information included
in the annual report but does not include the financial statements and our report of Réviseur d’Entreprises agréé thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report this fact. We have nothing to report in this regard.

Luxembourg, 27 April 2017 KPMG Luxembourg, Société coopérative


Cabinet de révision agréé

M. Wirtz-Bach

15
Management, distribution
and advisory
Investment Company Vietnam Emerging Market Fund SICAV
4, rue Thomas Edison
L-1445 Strassen, Luxembourg

Board of Directors of the Investment Company


Chairman of the Board of Directors Nguyen Xuan Minh
Vietnam Asset Management Ltd.

Deputy Chairman of the Board of Directors Thieu Thi Nhat Le


Vietnam Asset Management Ltd.

Members of the Board of Directors Felix Graf von Hardenberg


IPConcept (Luxemburg) S.A.

Heikki Nakari
Indie Investments
(until 22 January 2016)

Auditor of the Investment Company KPMG Luxembourg, Société coopérative


Cabinet de Révision agréé
39, Avenue John F. Kennedy
L-1855 Luxembourg

Management Company IPConcept (Luxemburg) S.A.


4, rue Thomas Edison
L-1445 Strassen, Luxembourg

Supervisory Board of the Management Company


Chairman of the Supervisory Board Dr. Frank Müller
Member of the Board of Managing Directors
DZ PRIVATBANK S.A.

Deputy Chairman of the Supervisory Board Ralf Bringmann (until October 12 October 2016)
Member of the Board of Managing Directors
DZ PRIVATBANK S.A.

Member of the Supervisory Board Julien Zimmer


Chief Representative „Investment Funds“
(until 12 October 2016)
DZ PRIVATBANK S.A.

Dr. Johannes Scheel (as of 13 October 2016)

Bernhard Singer (as of 13 October 2016)

Executive Board of the Management Company Nikolaus Rummler


(management body) Michael Borelbach

Auditor of the Management Company Ernst & Young S.A.


35E, Avenue John F. Kennedy
L-1855 Luxembourg

16
Management, distribution
and advisory
Depositary DZ PRIVATBANK S.A.
4, rue Thomas Edison
L-1445 Strassen, Luxembourg

Central Administration Agent and Registrar and DZ PRIVATBANK S.A.


Transfer Agent 4, rue Thomas Edison
L-1445 Strassen, Luxembourg

Paying Agent
Grand Duchy of Luxembourg DZ PRIVATBANK S.A.
4, rue Thomas Edison
L-1445 Strassen, Luxembourg

Germany DZ Bank AG
Deutsche Zentral-Genossenschaftsbank
Frankfurt am Main
Platz der Republik
D-60265 Frankfurt am Main

Fund Manager VAM Vietnam Fund Management Joint Stock Company


Unit 01-B, 15th Floor, The Landmark
5B Ton Duc Thang, District 1
Ho Chi Minh City
Vietnam

17
Production: KNEIP (www.kneip.com)

You might also like