“There is no room for fear when the objective is clear.”

– Virginia Hall Goillot - A former Officer in the American Office of Strategic Services during World War II.

AFC Funds and Asian frontier markets had a strong rebound in April on the back of the ceasefire announcement between the U.S. and Iran. We had written in our March 2026 newsletter that any move towards de-escalation will be positive for our markets, as their overall macroeconomic and political backdrop is much stronger compared to when we had a similar shock when the 2022 Ukraine conflict broke out. Our key markets like Vietnam, Pakistan, Sri Lanka and Iraq re-rated the most on the ceasefire news.

Key Asian Frontier Markets Rebounded in April (% change in USD)

Ruchir Desai on Marketing Trip to the U.S.

Ruchir Desai, Co-Fund Manager of the AFC Asia Frontier Fund, will be visiting the U.S. from 16^th-22^nd May 2026 to meet with and update existing and potential investors. The itinerary includes 16^th-17^th May: LA, 18^th May: San Franciso, 19-20^th May: NYC, and 21^st May: Miami. If you would like to meet with Ruchir in the U.S. to discuss our AFC Asia Frontier Fund, AFC Iraq Fund, or AFC Uzbekistan Fund, please email him on This email address is being protected from spambots. You need JavaScript enabled to view it. or the team at This email address is being protected from spambots. You need JavaScript enabled to view it.

The AFC Asia Frontier Fund has delivered an annualised total return of +21.8% in the last three years in USD terms, and the AFC Asia Frontier Fund’s key markets are very well positioned for a post-conflict rally given their attractive valuations and stable fundamentals.

The AFC Iraq Fund has reported an outstanding annualised return of +37.0% p.a. in the last three years while the AFC Uzbekistan Fund is up +29.5% in 2026, also in USD terms. The AFC Asia Frontier Fund has exposure to both Iraq and Uzbekistan via the above funds without an additional layer of fees.

AFC Quarterly Webinar on Tuesday, 12^th May 2026

Potential de-escalation in the Middle East has led to a very strong re-rating for AFC Funds and Asian frontier markets since the start of April 2026. With the potential for lower geopolitical uncertainty compared to when the conflict began, we expect Asian frontier markets to continue re-rating as investors can now again focus on the positive catalysts which have been in place since the start of the year.

Please join us for our quarterly update on Asian frontier markets, where we will discuss these significant developments, such as the performance and outlook for our AFC Asia Frontier Fund, AFC Iraq Fund, AFC Uzbekistan Fund, and AFC Vietnam Fund.

The speakers on the webinar will be:

• Thomas Hugger, CEO & Fund Manager
• Ruchir Desai, Co-Fund Manager of the AFC Asia Frontier Fund
• Ahmed Tabaqchali, Chief Strategist of the AFC Iraq Fund
• Scott Osheroff, CIO of the AFC Uzbekistan Fund
• Vicente Nguyen, CIO of the AFC Vietnam Fund

The webinar will highlight the following key points:

• Impact of the Middle East conflict on Asian frontier markets
• Are there any winners from the geopolitical tensions in the Middle East?
• AFC Asia Frontier Fund Outlook for the rest of 2026
• 2026 Outlook for the AFC Iraq Fund, AFC Uzbekistan Fund, AFC Vietnam Fund
• Key Concerns and Risks

The webinar will be held on Tuesday, 12^th May 2026 at 9:00 am NY, 2:00 pm UK, 3:00 pm Swiss and 9:00 pm HK/SG time and will be recorded for viewing at your convenience.
The webinar will run for 75 minutes, including a 30-minute Q&A session following the fund managers' presentations.

If you are unable to attend, please register nonetheless, and we will send you the link to the recording a day after the webinar.

May 2026 Subscription Cut-Off Date

The next cut-off date for subscriptions for our funds will be 22^nd May 2026. If you would like to know more about the subscription process, please get in touch with us at This email address is being protected from spambots. You need JavaScript enabled to view it.

Please find below the managers’ comments on each of our four funds for April 2026.

AFC in the Press

AFC Travel

Thomas Hugger, Ruchir Desai, and Peter de Vries are based in Hong Kong, while Andreas Vogelsanger is based in Bangkok, Vicente Nguyen in Ho Chi Minh City, Scott Osheroff in Tashkent, and Ahmed Tabaqchali in London and Iraq. If you have an interest in meeting with our team at their homeports or during their travels, please contact Peter de Vries at This email address is being protected from spambots. You need JavaScript enabled to view it.

AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned +6.3% in April 2026 with a NAV of USD 2,379.07. The MSCI Frontier Markets Asia Net Total Return USD Index gained +15.2%, while the MSCI Frontier Markets Net Total Return USD Index increased +10.2%, and the MSCI World Net Total Return USD Index rose +9.6%. Year to date, the fund returned +3.9% and the MSCI Frontier Markets Asia Net Total Return USD Index gained +3.8% in the same period. The performance of the AFC Asia Frontier Fund USD A-shares since inception on 30^th March 2012 now stands at +137.9% while the MSCI Frontier Markets Asia Net Total Return USD Index increased +29.3% during the same period. The fund’s annualised performance over 5 years is +10.5% with a Sharpe ratio of 0.65 and a Sortino ratio of 0.85. The broad diversification of the fund’s portfolio has resulted in low risk with an annualised volatility of 10.6% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.51, all based on monthly observations since inception.

The AFC Asia Frontier Fund reported a strong rebound on the ceasefire announcement between the U.S. and Iran, and gains for the fund were led by Pakistan, Kazakhstan, Georgia, Sri Lanka, Iraq, Bangladesh, and Uzbekistan. It was a broad-based rally across the fund’s portfolio as we anticipated a re-rating on any de-escalation in the Middle East.

Ruchir Desai, Co-Fund Manager of the fund, was in Dhaka, Bangladesh in April to get a sense of the mood on the ground after the country's parliamentary elections and post the Middle East conflict. Before the Middle East conflict began, Bangladesh had achieved much greater macroeconomic stability in the form of higher foreign exchange reserves, a stable current account, and recovering business and consumer sentiment.

The parliamentary elections held in February 2026 brought much-needed political stability in the form of a majority pro-business government, which should lead to further reforms and sound policymaking. The combination of both macroeconomic and political stability was beginning to have a very positive impact on investor sentiment, with the Dhaka Stock Exchange Broad Index up by +16% for the year in USD terms before the Middle East conflict began. Despite the ongoing conflict, the Dhaka Stock Exchange Broad Index is still up for the year with a gain of +8% in USD terms.

On the Ground in the New Dhaka Metro in Bangladesh

The management teams of the companies we met across industries like banks, consumer goods, construction materials, and telecoms were all very optimistic for a robust economic rebound in Bangladesh once the clouds of the Iran conflict are lifted, as the country now has a significantly stronger platform to drive long-term economic growth compared to the last fifteen years, because of the macroeconomic and especially political stability.

The AFC Asia Frontier Fund has been increasing its allocation to Bangladesh over the past year, since the stock market valuations are at a decade low, while the positive catalysts are in place to drive a sustained upward re-rating on the Dhaka Stock Exchange on the back of an earnings growth recovery backed by political stability. Bangladesh is with 10.6% the fund's fourth largest country weighting.

Valuations in Bangladesh at a Decade Low

The best-performing indexes in the AAFF universe in April were Vietnam (+10.7%) and Pakistan (+9.4%). The poorest-performing markets were Laos (−3.8%) and Mongolia (−1.0%). The top-performing portfolio stocks this month were a nickel miner in Vietnam (+57.6%), the stock exchange operator in Pakistan (+21.0%), a Pakistani tobacco producer (+19.9%), a Georgian bank (+19.0%), and another bank from Georgia (+18.9%).

In April, the fund increased some positions in Mongolia while reducing others.

At the end of April 2026, the portfolio was invested in 63 companies, 2 funds, and held 6.1% in cash. The two biggest stock positions were a bank in Uzbekistan (4.9%) and a bank in Kazakhstan (4.1%). The countries with the largest asset allocation were Pakistan (14.5%), Sri Lanka (12.3%), and Uzbekistan (11.8%). The sectors with the largest allocation of assets were financials (37.4%) and consumer goods (17.0%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 7.27x, the estimated weighted harmonic average P/B ratio was 1.35x, and the estimated weighted average portfolio dividend yield was 4.19%. The fund’s portfolio carbon footprint is 0.18 tons per USD 1 mn invested.

AFC Iraq Fund - Manager Comment

The AFC Iraq Fund Class D shares returned +5.1% in April 2026 with a NAV of USD 2,624.55, in line with its benchmark, the Rabee Securities RSISX USD Index (RSISUSD index), which gained 5.0% during the month. The fund gained 43.5% in 2024 on the back of a stellar performance in 2023 of +110.4%. The fund is up by 9.3% for the year versus the index, which went up by 8.4%. Since inception, the fund has gained 162.5% while the RSISUSD index is up by 84.7%, an outperformance of 77.8%. The annualised return since inception of the fund stands at +9.3% p.a.

The market’s action throughout April built upon those of March and February, with the month-on-month increase of 1.5% in February, followed by 2.6% in March, and 5.1% in April. Similarly, the month-on-month increase in trading volumes –as measured by the average daily traded value– built upon that of the prior two months with an increase of 26.5% in February, followed by 22.1% in March and by 27.2% in April. Promisingly, the cumulative three-month volume increase took the April average trading volume to twice that of the anaemic one in January, placing it in line with the average trading volume of 2023-25, in which the market was up 224.5% (trading volumes adjusted for block-trades). From a technical analysis perspective, the market’s action continues to be that of consolidating its three-year gains, and a continued consolidation or a pull-back should be within its multi-month uptrend (chart below).

Rabee Securities U.S. Dollar Equity Index and Daily Turnover

Supporting the market’s continued rally were the sizable dividends announced by two of the top three banks in the market, with Mansour Bank (BMNS)’s announcement in March of a cash dividend amounting to a 4.7% dividend yield, and a 31.5% share dividend, for an effective dividend yield of 19.5%. This was followed, in April, by the National Bank of Iraq (BNOI)’s announcement of a cash dividend amounting to a 4.9% dividend yield, and a 25.0% share dividend, for an effective dividend yield of 9.5%. 

The returns of these oversized dividends were further boosted by a couple of peculiarities of the securities’ regulation, and of the stock market action before and after a stock dividend issuance. The first of which is that the dividend stock’s price is always issued at nominal value, i.e. Iraqi dinar (IQD) 1.0, irrespective of the stock’s market price. The second is that stock prices don’t always immediately adjust fully for the effects of a stock dividend, or for that matter for cash dividends. In other words, stock prices on the ex-dividend days don’t always decline proportionally to compensate for the dividend’s issuance. In the case of a company’s positive earnings momentum, especially when its stock’s market price is above IQD 1.0, market participants strongly bid up the stock up to the AGM, and tend to sell immediately on the ex-dividend day, and on subsequent days, to benefit from such a peculiarity, which tends to take stock prices towards the theoretically dividend-adjusted stock price. In the case of both BMNS and BNOI, their stock market prices, for the most part, followed such a script. However, their prices quickly recovered, with BMNS ending March up 4.7% above the theoretically dividend-adjusted price that was followed by another 8.0% increase in April for a cumulative 13.1% positive return. While BNOI ended April 5.2% higher than the theoretically dividend-adjusted price – both cases are an indication of the underlying health of the market. 

Not wishing to miss out, the Bank of Baghdad (BBOB) declared a cash dividend amounting to a 12.1% dividend yield, in their just concluded AGM on 3^rd May. These dividends promise a repeat of last year’s humongous dividends by the other top companies in the market, such as Asiacell Communications (TASC), and Baghdad Soft Drinks (IBSD). 

The icing on the cake, in addition to these dividends and the market’s positive action, is the unusually mild weather in the country this time of the year. Baghdad’s weather in late afternoons is mild, with many cool nights, some of which were punctured by lightning, and thunder followed by heavy rains –with forecasts of more to come in the next few days. The cooler weather made walkabouts extremely pleasant in Baghdad, the city that is full of life and that never sleeps – as experienced the last few days at 1 am in trying to secure a table in a popular grill house in Yarmouk’s lively Four-Streets, at the end of a long walkabout that started late afternoon (pictures below).

Late Afternoon, Early Evening Walkabout in Yarmouk, Following a Rainy Night

Yarmouk’s Four-Streets After-Midnight

In conclusion, while being fully cognizant of the geopolitical risks, we remain convinced that the high quality of the fund’s holdings and their future earnings growth will drive the fund’s performance irrespective of any volatility that the next few days and weeks might bring. The same holds for the two key dynamics discussed here often – the cumulative positive effects of the relative stability and structural banking developments – that are in the early stages of their transformation of the economy, a process that would unfold over the next few years. However, considerable risks remain, in that the current pause in the U.S.-Israel war on Iran, in the form of “no war-no peace”, could end up reigniting a conflict that could escalate considerably beyond the control of participants, direct and indirect, and become an all-out war engulfing the region, filled with all the nightmare scenarios that are popping up in the media, by experts and “experts”.

At the end of April 2026, the AFC Iraq Fund was invested in 8 names and had a cash level of 5.7%. The fund invests in both local and foreign-listed companies that have the majority of their business activities in Iraq. The markets with the largest asset allocation were Iraq (92.3%), Norway (1.9%), and the U.K. (0.1%).

The sectors with the largest allocation of assets were financials (62.7%) and communications (20.6%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 7.36x, the estimated weighted harmonic average P/B ratio was 2.07x, and the estimated weighted average portfolio dividend yield was 6.84%. The fund’s portfolio carbon footprint is 0.06 tons per USD 1 mn invested.

AFC Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned +1.2% in April 2026 with a NAV of USD 1,957.21, bringing the year-to-date return to +29.5%. The return since inception (29^th March 2019) now stands at +95.7%, representing an annualised return of +9.9% p.a.

April 2026 continued the uptrend the fund has been on since April last year, as Uzbekistan’s capital markets continue to mature. On 29^th April 2026, we also saw the long-awaited official launch of the Uzbekistan National Investment Fund (UzNIF) IPO with the opening of the subscription process, whose London tranche was oversubscribed within minutes.

UzNIF Prepares for IPO

Since Asia Frontier Capital entered Uzbekistan in 2018, we have been privy to several privatisation announcements by the Uzbek government, which unfortunately fell silent and simply disappeared from the government’s agenda. We attribute this to the state of the country’s reform agenda and the lack of capacity to execute this rigorous process. To give some colour, in 2021 the government had a list of 14 state-owned enterprises (SOE’s) slated for IPO. A local broker organised an investor trip where we visited some of them, specifically a state-owned bank, where we asked about the timeline for the IPO. The Chairman responded verbatim, “Oh, that’s a mistake, we won’t IPO. We will be removed from the list”. Several months later, the bank was indeed removed from the list. That’s not a good look when investors are intrigued and watching – at least in our view! 

However, things have taken a 180-degree turn in recent years, and the UzNIF is a shining example of this. The government is now entirely on board with reforms of UzNIF’s portfolio companies and the broader capital markets. UzNIF, being managed by Franklin Templeton (FT), has seen a restructuring of the boards of its 13 portfolio companies (down from the initial 18) and is already making improvements, with UzNIF seeing its NAV rise approximately USD 750 million since Templeton took over in the spring of last year. 

Uzbekistan truly is a different country from the one we began investing into in 2018 (initially through the AFC Asia Frontier Fund) when there were still capital controls and most of the local population was unaware there was even a stock market, and when many local businessmen thought we were “crazy” to be buying shares of companies growing at 500-600% per year, some with 50% dividend yields. It was a risk, but our first-mover advantage and the extremely deep value offered in companies listed on the Tashkent Stock Exchange justified investing.

On 29^th April 2026, UzNIF filed with the London Stock Exchange that its subscription book is open for up to 30% of the outstanding shares. The deal is being priced at USD 1.95 billion, which is a 20% discount to the net asset value of USD 2.44 billion. The London tranche of the deal was oversubscribed within minutes, and a substantial portion of the Uzbek tranche was also taken up by the end of the day. We expect the local tranche to be fully subscribed for as well by the time the book closes. Locally, many Uzbek investors however remain sceptical about this deal with our friends saying some of the larger portfolio companies are poorly run, some are bloated with employees, etc. Some of this is true, but Franklin Templeton’s focus is to wring the excess from these businesses and drive efficiency and profitability which will drive the NAV and eventual dividend payouts higher. This is the EXACT mindset we saw among locals up until recently, where we were consistently told we were “crazy” for investing in the Uzbek stock market (a great contra-indicator). Meanwhile, our performance has been strong, and we expect this next phase of SOE IPOs being privatised to be the spark for the market’s next re-rating. 

As we’ve written, the pace of reform is accelerating in Uzbekistan. On 29^th April 2026, the government also announced it would be implementing regulatory asset base tariffs in the electricity and natural gas sectors and across all power producers by the end of May 2026. This will ensure producers benefit from more market-based tariffs in order to incentivise further capital expenditure in the sector and ensure economic returns to investors. This was originally planned to occur in 2028 but has been accelerated 1.5 years ahead of initial plans. UzNIf holds shares in SOEs with power generation and electrical infrastructure assets, and this is expected to add an additional 14% to their NAV (which will be calculated monthly and will therefore be reflected in the May 2026 NAV). This means the IPO, which the AFC Uzbekistan Fund is subscribing for shares of, will actually be offered at a nearly 30% discount to NAV, which screams to us ‘substantial value’! We look forward to the commencement of trading around 14^th May 2026 in London and Tashkent.

The Bond Market is Booming. Are Equities Next?

The days of persistent double-digit currency depreciation and 25%-30% bank term deposits in local currency are, dare we say, officially behind us. 

On 1^st April 2026, Uzbekistan placed a USD 1 billion equivalent sovereign bond at a historic low yield of 12.25% in Uzbek som. This is down from previous sovereign bond issues in 2025, with a yield of 15.5%, and in 2024, at a yield of 16.63%. The recent deal attracted roughly 50 foreign investors, with the order book 4x oversubscribed, as has been the case in most offerings, as there is strong demand for the country’s debt. 

In the early years of our investing in Uzbekistan, the currency in some years depreciated by double-digits versus the USD. Meanwhile, last year the currency appreciated roughly 7%, and year-to-date the currency is flat. We’ve written countless times over the years that our thesis is, as the country opened to the world and adjusted its economy, that the double-digit inflation and currency depreciation would subside, leading to falling central bank policy and bank term deposit rates, followed by falling corporate bond yields, and a translation into rising equity prices off the back of SOE privatisations to kickstart the market. It appears that it is indeed the order of operations Uzbekistan has followed, and with the corporate bond market taking off, next is the equity market.

As is happening in the sovereign bond market, the same is happening in the corporate bond market. Nearly two years ago, companies couldn’t place even USD 2 million in debt in the local market, while today an issue several times that size can easily be oversubscribed. The corporate bond market has awoken as bank term deposit rates have steadily moved lower. Uzum, Uzbekistan’s only startup unicorn and the country’s largest E-commerce and consumer goods finance business (which is planning an international IPO in the near future), is a leading example of local domestic demand for corporate debt. The company recently issued its 4^th bond for UZS 500 billion (~USD 40 million) at 19%, which is a strong improvement from its prior offerings in February 2026 at 22%, November 2025 at 24%, and March 2025 at 25%. The 600-basis point improvement is a sign of strong local demand and investors willing to reposition from bank term deposits or keeping cash under the mattress, a strong indication of a growing and increasingly healthy capital markets. Again, this is another indicator to us that the stock market bottomed in March 2025 and with additional SOE IPO’s and eventual private sector IPO’s, Uzbekistan’s capital markets are in the process of forever maturing (from a very low base), and we believe we remain in the early phase of this trend change.

AFC Uzbekistan Tour 2026

AFC is planning to host its 5^th AFC Uzbekistan Tour, bringing existing and prospective investors to experience the reality of Uzbekistan from the ground. We will be hosting a day tour in late September 2026. This will include a half-day tour of Tashkent, a visit to several of the fund's portfolio companies, followed by dinner. If you are interested in attending, please write to us at This email address is being protected from spambots. You need JavaScript enabled to view it. to express your interest, and we will follow up with you.

At the end of April 2026, the fund was invested in 23 names and held 10.64% in cash. The portfolio was allocated to Uzbekistan (89.32%) and Kyrgyzstan (0.04%). The sectors with the largest allocation of assets were financials (59.04%) and materials (17.93%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 5.70x, the estimated weighted harmonic average P/B ratio was 0.87x, and the estimated weighted average portfolio dividend yield was 3.05%.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned −1.3% in April with a NAV of USD 3,431.13, bringing the 2026 return to −3.4% and the return since inception to +243.1%. This month, the fund underperformed the benchmark, the Ho Chi Minh City VN Index, which gained 10.7% in USD terms. The fund’s annualised return since inception stands at +10.5% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 14.80%, a Sharpe ratio of 0.57, and a low correlation of the fund versus the MSCI World Index USD of 0.49, all based on monthly observations since inception.

Nearly two months after the outbreak of the U.S.–Iran conflict on 28^th February 2026, global markets remain highly volatile, with continued sharp swings across major indices. In April, the Vietnamese market partially recovered from its March lows, though the rebound was largely driven by Vingroup-related stocks, particularly VIC, VHM, and VRE, while the broader market lagged, as reflected in weak market breadth with decliners significantly outnumbering advancers.

VN-Index from April 2022 to April 2026

Advance/Decline Ratio - April 2026

Market Developments

April was a challenging month, with a negative advance-decline ratio indicating that the broader market did not participate in the rally. As a result, the AFC Vietnam Fund underperformed the benchmark, reflecting its diversified positioning and lack of exposure to Vingroup-related names such as VIC, VHM, and VRE, which were the primary drivers of the index and contributed over 99% to its gain during the month!

Importantly, this price-driven underperformance contrasts with the strong underlying fundamentals of our fund's portfolio. Earnings across our holdings remained robust, with all top 10 positions delivering solid profit growth in Q1 2026. This broad-based improvement reinforces our conviction in portfolio quality, with standout performance from MPC, which reported nearly 500% profit growth (YoY), highlighting the strength of the earnings recovery within our investments.

Vietnam Upgraded to Emerging Market by FTSE Russell

During the month, the Vietnamese stock market was supported by the official upgrade to Secondary Emerging Market status by FTSE Russell, following the successful March 2026 interim review. This landmark milestone places Vietnam alongside major emerging markets such as China, Taiwan, India, and Brazil, reflecting years of regulatory reforms led by the Ministry of Finance, the State Securities Commission (SSC), and the Vietnam Securities Depository and Clearing Corporation (VSDC). Vietnam had been on the watchlist since September 2018.

The reclassification will take effect on 21st September 2026, with a phased four-tranche implementation (10%, 20%, 35%, 35%) through September 2027. Foreign inflows are estimated at USD 6–8 bn, with upside potential toward USD 10 bn in a bullish scenario, driven primarily by active funds. Vietnam is expected to receive modest but meaningful index weights across FTSE indices, reinforcing a sustained inflow story and supporting long-term market liquidity and valuation expansion.

U.S.-Iran Conflict

By April, while tensions remained elevated, both sides moved toward de-escalation with a ceasefire to facilitate negotiations. The Strait of Hormuz gradually reopened, allowing oil shipments to resume and easing supply disruptions. As a result, crude prices declined from their early April peak, while several Asian countries began receiving previously delayed cargoes, helping to normalize supply conditions.

Vietnam also benefited from this improvement. National oil reserves increased to around 24 days (from 15 days in February), enabling the government to cut retail fuel prices by approximately 25% in mid-April. Although geopolitical risks persist, the willingness of the U.S. and Iran to enter formal negotiations signals a potential stabilization of the situation in the near term.

Oil Price

New Government Successfully Formed

In April, Vietnam’s National Assembly completed the appointment of key leadership positions for the 2026–2030 term, including the President, Prime Minister, and cabinet members. Following the outcome, Tô Lâm was selected as President, while Lê Minh Hưng was appointed Prime Minister.

After the new administration was established, Prime Minister Lê Minh Hưng reaffirmed the government’s ambitious target of achieving 10% annual GDP growth over 2026–2030. He has also begun coordinating closely with the State Bank of Vietnam and relevant ministries to implement policies to support this high-growth agenda.

To Lam was Selected to be the President of Vietnam

Strong Start to 2026: GDP Growth at 15-Year High

Despite ongoing global turbulence, Vietnam continues to stand out as one of the fastest-growing economies globally. In Q1 2026, GDP expanded by 7.83%, the highest first-quarter growth rate in the past 15 years, since 2011.

This strong performance was driven by robust industrial production, a solid recovery in domestic consumption, and accelerating tourism activity, highlighting the resilience and broad-based strength of Vietnam’s economic momentum.

Broad-Based Growth Across Key Economic Drivers

Vietnam’s strong Q1 2026 performance was supported by a wide range of core growth engines, underscoring the economy’s fundamentally healthy and well-balanced expansion. Industrial production rose by 9.0% year-on-year, while foreign direct investment remained robust, with registered capital surging 42.9% to USD 15.2 bn and disbursement increasing 9% to USD 5.4 bn.

External demand also stayed resilient despite global turbulence. Export turnover grew 19.1% year-on-year to a record USD 126.6 bn, with the United States remaining Vietnam’s largest market at USD 50.1 bn, accounting for nearly 40% of total exports. At the same time, tourism continued its strong recovery, with international arrivals reaching a record 6.7 m in Q1 (+12.4% YoY). Authorities expect total visitors to exceed 24 m in 2026, positioning Vietnam as one of the world’s fastest-growing and most attractive travel destinations.

Vietnam’s stable and resilient economic growth has been consistently demonstrated over many years, rather than driven by any single event or short-term cycle. This track record reinforces confidence in the country’s structural strength and long-term growth trajectory.

We remain firmly convinced that Vietnam’s economy will continue to expand at a robust pace over the next five years and beyond, supported by strong fundamentals, ongoing reforms, and sustained investment momentum.

1^st Quarter 2026 Earnings and AGM Updates

April marked a busy AGM season for the AFC Vietnam Fund, providing valuable insights into 2026 business plans and long-term strategies across our portfolio. Most of our top holdings delivered strong Q1 results, particularly export-oriented companies such as TNG, PTB, and MPC, which reported impressive net profit growth of 42%, 30%, and 495%, respectively, compared to Q1-2025. Notably, both TNG and PTB achieved record-high quarterly earnings, with net profits of VND 75 bn and VND 189 bn, respectively. Management across these companies expressed strong confidence in sustained demand, supported by solid global order books, and outlined ambitious expansion plans. For instance, MPC is set to commence operations at a new factory in May 2026, with additional facilities planned for 2027 and 2028 to double capacity.

Beyond exports, infrastructure-related holdings also continued to perform strongly. At the AGM of LBM, Chairman Le Dinh Hien highlighted that Q1 net profit surged 38% year-on-year to a record high, and reaffirmed the company’s target to double earnings over the 2026–2030 period. Overall, AGM discussions reinforced our conviction that our portfolio companies are executing well and remain well-positioned for sustained growth.

Earnings Growth of the Top 10 Holdings in Q1 2026 (YoY)

At the end of April 2026, the fund’s largest positions were: Minh Phu Seafood Corp (9.1%) – a seafood company, Agriculture Bank Insurance (7.9%) – an insurance company, Lam Dong Minerals and Building Materials (7.3%) – a building material supplier, Phu Tai JSC (7.1%) – a home and office furnishings company, and Vietnam Technological & Commercial Joint Stock Bank (5.7%) – a commercial bank.

The portfolio was invested in 34 names and held 2.6% in cash. The sectors with the largest allocation of assets were financials (39.9%) and consumer (38.0%). The fund's estimated weighted harmonic average trailing 12 months P/E ratio (only companies with profit) was 8.76x, the estimated weighted harmonic average P/B ratio was 1.18x, and the estimated weighted average portfolio dividend yield was 3.97%. The fund’s portfolio carbon footprint is 1.85 tons per USD 1 mn invested.

I hope you have enjoyed reading this newsletter. If you would like any further information, please get in touch with me or my colleagues at This email address is being protected from spambots. You need JavaScript enabled to view it.

With kind regards,

Thomas Hugger
CEO & Fund Manager

This email address is being protected from spambots. You need JavaScript enabled to view it.

Disclaimer:

This Newsletter is not intended as an offer or solicitation with respect to the purchase or sale of any security. No such offer or solicitation will be made prior to the delivery of the Offering Documents. Before making an investment decision, potential investors should review the Offering Documents and inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of shares, and any foreign exchange restrictions that may be relevant thereto. This newsletter is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law and regulation, and is intended solely for the use of the person to whom it is intended. The information and opinions contained in this Newsletter have been compiled from or arrived at in good faith from sources deemed reliable. Opinions expressed are current as of the date appearing in this Newsletter only. Neither Asia Frontier Capital Ltd (AFCL), nor any of its subsidiaries or affiliates will make any representation or warranty to the accuracy or completeness of the information contained herein. Certain information contained herein constitutes “forward-looking statements”, which can be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of Funds managed by AFCL or its subsidiaries and affiliates may differ materially from those reflected or contemplated in such forward-looking statements. Past performance is not necessarily indicative of future results.

For Switzerland only: This is an advertising document. The state of the origin of the fund is the Cayman Islands. This document may only be provided to qualified investors within the meaning of art. 10 para. 3 and 3ter CISA. In Switzerland, the representative is Acolin Fund Services AG, Maintower, Thurgauerstrasse 36/38, 8050 Zurich, Switzerland, whilst the paying agent is NPB Neue Privat Bank AG, Limmatquai 1 / am Bellevue, 8024 Zurich, Switzerland. The basic documents of the fund report may be obtained free of charge from the representative. Past performance is no indication of current or future performance. The performance data do not take account of the commissions, if any, and fund transfer costs incurred on the issue and redemption of units.

AFC Asia Frontier Fund is registered for sale to qualified/professional investors in Japan, Singapore, Switzerland, the United Kingdom, and the United States. AFC Iraq Fund and AFC Uzbekistan Fund in Singapore, Switzerland, the United Kingdom, and the United States. AFC Vietnam Fund in Japan, Singapore, Switzerland, and the United Kingdom. 

By accessing information contained herein, users are deemed to be representing and warranting that they are either a Hong Kong Professional Investor or are observing the applicable laws and regulations of their relevant jurisdictions.

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