Open-end funds, also known as mutual funds, are one of the most popular investment products worldwide. They allow investors to pool money into a professionally managed portfolio while enjoying flexibility, transparency, and diversification. In Vietnam, investing in open-end funds requires opening a fund certificate trading account and placing buy, sell, conversion, or transfer orders through authorized Distributors appointed by the fund management company.

If you are wondering how to invest in open-end funds, this step-by-step guide will walk you through everything you need to know.

Why Choose Open-End Funds?

Before we dive into the process, it’s important to understand why investors choose open-end funds:

• Professional management: Managed by licensed fund management companies.
• Diversification: Access to a broad portfolio of securities.
• Liquidity: Investors can buy or redeem units on any trading day.
• Flexibility: Options to invest systematically or in lump sums.
• Transparency: NAV (Net Asset Value) is published daily.

Step 1: Open a Fund Certificate Trading Account

To start investing, you must open a trading account with an authorized Distributor. The required documents differ for individual investors and institutional investors.

For Individual Investors:

• Valid Power of Attorney (if applicable).
• Certified copy of ID card/passport (for both investor and authorized person, if any).
• Bank confirmation of a capital contribution account (CCA) or indirect investment capital account (for foreign investors).
• Trading Code Registration Certificate from the Vietnam Securities Depository (for foreign investors).
• FATCA forms if applicable (e.g., W-8BEN or W9 for U.S. taxpayers).

Provided by Distributor:

• Application Form for Opening a Fund Certificate Trading Account.
• Online Trading Registration Form.

For Institutional Investors:

• Valid Power of Attorney (if applicable).
• Certified Enterprise Registration Certificate.
• Supplementary Information Form for institutional investors.
• Certified documents regarding any changes in enterprise registration (if any).
• Certified ID/passport of legal representative and authorized persons.
• Bank confirmation of a CCA or indirect investment capital account (for foreign investors).
• Trading Code Registration Certificate from the Vietnam Securities Depository (for foreign investors).
• FATCA forms if applicable (e.g., W-8BEN-E, W-8ECI, W-8IMY, W-8EXP, or W9).

Step 2: Place Transactions

Once your account is active, you can begin trading fund certificates.

1. Purchase Orders (Buying Fund Certificates)

• Fill in the Fund Certificate Purchase Application Form and submit it to the Distributor.
• Attach proof of payment made to the fund’s custodian bank. Payments can be made from your bank account, securities account at a Distributor, or via an authorized representative.
• Transfer fees are borne by the investor.

Invalid purchase orders include:

• Orders submitted after the cut-off time.
• Payment made without submitting a purchase application.
• Late payments (after 17:00 on T-1, the day before trading).
• Investment below the fund’s minimum subscription amount.

2. Redemption Orders (Selling Fund Certificates)

• Submit a Redemption Form to the Distributor.
• Proceeds will be transferred to your registered bank account within T+3 business days.
• Payments are made in VND, and applicable taxes will be withheld according to Vietnamese law.

3. Conversion Orders (Switching Between Funds)

• You may convert some or all of your holdings from one fund to another managed by the same company.
• The process is executed as a redemption from the source fund, followed by a purchase in the target fund.

4. Transfer Orders

• For non-commercial transfers of fund certificates, contact the Fund Management Company directly.
• Transfer Agents must update ownership records and confirm with the Distributor within T+2 business days.

Step 3: Online Trading Option

Most fund management companies in Vietnam now provide online trading platforms. After activating online access, investors can conveniently place purchase, redemption, or conversion orders directly through the company’s website.

Best Practices for Investors

When learning how to invest in open-end funds, keep the following in mind:

• Start with clear goals: Define whether you are saving for retirement, education, or long-term wealth building.
• Invest regularly: Consider a Systematic Investment Plan (SIP) to benefit from cost averaging.
• Stay informed: Monitor NAV updates, market trends, and fund performance reports.
• Think long term: Open-end funds are best suited for medium to long-term investment horizons.
• Work with trusted Distributors: Choose reliable partners for safe and transparent transactions.

Final Thoughts

Open-end funds are an accessible and effective way to participate in the financial markets while enjoying professional management, diversification, and flexibility. By following the steps above, you now know how to invest in open-end funds in Vietnam—from opening an account to placing buy, sell, or conversion orders.

Whether you are a new or experienced investor, disciplined investing through open-end funds can help you achieve your long-term financial goals.