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Bargain shares: Exploiting a tender offer

A little known closed-end fund that is a play on secular growth trends in Vietnam has produced eye-catching investment returns this year. It has also devised a way to return cash to shareholders and narrow the unwarranted share price discount to NAV.
Bargain shares: Exploiting a tender offer

•    Tender offer for 30 per cent of shares in issue at 2 per cent discount to NAV.
•    Excess application facility enables tenders for more than basic entitlement.
•    Tender payments to be made in mid-September.
•    Fund up 42.1 per cent in 2021, or 8.7 percentage point outperformance of Vietnam All-Share index.

Vietnam Holding (VNH:263p), a little known closed-end fund that holds a concentrated portfolio of mid to small-cap companies to play secular growth trends in Vietnam, has produced eye-catching investment returns this year, even if this is yet to be fully reflected in the company’s rating.

The share price of the £112m market capitalisation company is up 30 per cent on an offer-to-bid basis since I included the shares, at 206p, in my market beating 2021 Bargain Shares Portfolio, but this lags behind the 39 per cent gain in the fund in the same six-month period. The fund has outperformed the Vietnam All-Share index by almost nine percentage points in the calendar year to date, too.

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