VinaCapital Vietnam Opportunity Fund (VOF), a specialist fund that invests in quoted and unquoted Vietnamese companies, has announced its maiden dividend.
The board has decided to introduce a dividend, paid out twice each year, to reflect the flow of income coming from the fund’s underlying investments.
The move marks the latest stage in the board's attempt to attract new investors to the fund, following its move to the main market of the London Stock Exchange last year.
It hopes the income received will grow over time, with an influx of new investors helping to narrow the shares' discount to net asset value (NAV).
VinaCapital Vietnam Opportunity currently trades on an 18.8% discount, compared to an average discount of 13.8% in Numis’s Vietnam sector.
The fund has consistently traded on a heavy discount, with a spike to 28% in early 2016.
The board added that dividend payments would not necessarily be fully covered by income. It intends to pay a dividend twice each year, typically in March and October.
Shareholders in VinaCapital Vietnam Opportunity will receive their first dividend of 4.8 cents per share on 27 September. This equates to around 2% of the NAV each year, with the annual dividend set to total 9.6 cents per share. This represents a yield of around 2.5% on the current share price.
The dividend will be paid in sterling to shareholders with registered addresses in the UK and Channel Islands. Shareholders with addresses outside the UK will receive the dividend in US dollars unless otherwise specified.
The maiden dividend follows strong performance for the fund, whose shares have risen 32.3%, over the last 12 months, slightly ahead of the 31% average from funds in the Vietnam sector. Over the same period, its NAV grew by 24.8%, just ahead of 24% by the sector.
VinaCapital Vietnam Opportunity enjoyed an even stronger 2016 – in which its share price rallied by 69% and the fund moved to a main market listing on the London Stock Exchange.
The board has also embarked on a share buyback programme, which it hopes will help to bring the discount in.