In a recent communication to investors, Petri Deryng, the head of the Pyn Elite Fund, expressed his dismay at the stock market's performance in July, labeling it as 'Horrible July.' As of July 22, the fund's performance had plummeted by 9.6%, while the VN-Index experienced a significant drop of 10.3% compared to the beginning of the month. This downturn is particularly alarming as it represents the worst monthly performance for the fund since its inception, and the most substantial loss since October 2023.

Deryng noted that many investors might have opted to enjoy their summer vacations rather than closely monitoring the turbulent stock market. The unexpected downturn comes despite impressive profit growth reported by listed companies in the first quarter and the robust economic growth of Vietnam in the first half of the year.

The cautious sentiment among investors, coupled with declining stock prices, has raised concerns about a continuing downward trend, leading to significant sell-offs throughout July. Deryng expressed regret over the recent market decline, particularly as he anticipates strong profit growth for listed companies throughout 2026.

One contributing factor to the recent sell-off may be the high demand for loans, which has driven interest rates up. Attractive interest rates have diverted funds from the stock market to savings accounts. Additionally, ongoing tensions between the United States and Iran could introduce uncertainties regarding inflation expectations and interest rates.

Despite the challenges, Deryng believes that the decline in stock prices amidst rising corporate profits has made valuations more attractive than ever. He highlighted the case of Mobile World Investment Corporation (MWG), a rapidly growing retailer, which currently has a price-to-earnings (P/E) ratio below 10, compared to its previous trading range of 20-25.

The Pyn Elite Fund is one of the largest foreign funds operating in the Vietnamese stock market, with assets under management exceeding 890 million EUR (approximately 1 billion USD) as of the end of June. The fund's top ten investments primarily consist of financial sector stocks, including banks and securities companies, with a significant allocation to blue-chip stocks such as Hòa Phát Group (HPG), MWG, and FPT Corporation (FPT). However, most of the fund's leading stocks have also shown disappointing performance in July.