CGS SG ETF SERIES I 2025 Financial Results: In-Depth Analysis for Investors

Overview

CGS SG ETF SERIES I, constituted in Singapore and managed by CGS International Securities Singapore Pte. Ltd., has released its audited financial statements for the year ended 31 December 2025. The fund’s primary sub-fund, the CGS Fullgoal Vietnam 30 Sector Cap ETF, aims to replicate, before expenses, the performance of the iEdge Vietnam 30 Sector Cap Index. This index tracks the 30 largest and most liquid companies listed in Ho Chi Minh City, Vietnam, subject to sector caps and values-based exclusion screening.

Key Financial Highlights

• Strong Turnaround in Performance:
  The Sub-Fund posted a total return after income tax of US\$8.52 million for 2025, a significant reversal from the US\$1.69 million loss in 2024. This was driven by a robust rebound in the value of investments, which saw net gains of US\$8.72 million in 2025 compared to net losses of US\$1.63 million in 2024.
• Net Assets and Redemptions:
  Net assets attributable to unitholders declined from US\$17.6 million at the end of 2024 to US\$11.64 million at 31 December 2025. The decrease was primarily due to substantial unit cancellations, with 12.36 million units redeemed versus only 220,000 units created during the year.
• Expense and Turnover Ratios:
  The expense ratio rose to 2.11% in 2025 from 1.79% in 2024, while the portfolio turnover ratio increased to 31.32% (2024: 28.27%). Higher expenses and portfolio turnover may impact future net returns.
• Top Holdings and Sector Exposure:
  The fund’s largest positions as of year-end 2025 were Vingroup JSC (20.96% of NAV), Vinhomes JSC (9.41%), and Vietnam Dairy Products JSC (8.55%). The fund is heavily weighted towards the real estate (36.58%), food (15.29%), and diversified financial services (13.86%) sectors.
• Management and Trustee Fees:
  Management fees are set at 0.99% per annum of NAV, and trustee fees at 0.01% of NAV, subject to a minimum US\$15,000 per year.

Important Shareholder Information and Price-Sensitive Issues

• Large Unit Redemptions:
  The ETF saw a sharp reduction in outstanding units (from 20.54 million to 8.40 million), reflecting significant redemptions by investors. This exodus may signal either profit-taking after a strong year or concerns over market outlook or fund structure, and can affect liquidity and NAV per unit.
• Expense Ratio Increase:
  The rise in expense ratio above 2% may become a drag on future net returns, especially if the fund does not maintain strong performance. This is above the average for many ETFs, potentially making it less attractive compared to peers.
• Sector and Stock Concentration Risks:
  The fund is highly concentrated in Vietnamese real estate and a handful of large-cap stocks. Any adverse developments in Vietnam’s property market or among top holdings such as Vingroup JSC and Vinhomes JSC could disproportionately impact the ETF’s NAV and share price.
• Currency and Regulatory Risks:
  The portfolio is almost entirely denominated in Vietnamese Dong (VND), a controlled currency with intervention by the State Bank of Vietnam. Any significant devaluation, capital controls, or regulatory shifts in Vietnam may affect returns for USD-based investors.
• No Financial Derivatives or Borrowings:
  The fund did not engage in securities lending, derivatives, or borrowing, reducing counterparty and leverage risks; however, it also means the ETF is fully exposed to the underlying equities and does not hedge market or currency risks.

Other Noteworthy Points

• Index Construction:
  The benchmark applies values-based exclusion screening, avoiding companies involved in defense, gambling, tobacco, drugs, and alcohol, and uses a 10% maximum stock weight and 25% maximum sector cap to avoid over-concentration.
• Tax Status:
  The fund benefits from favorable tax treatment under Singapore’s Section 13D Offshore Fund Scheme, with no income tax levied on qualifying investment income.
• Audit Opinion:
  The fund received a clean audit opinion from Ernst & Young LLP, with no key audit matters identified.

Conclusion: Potential Impact on Share Price

The sharp improvement in investment performance in 2025 is a positive sign and may attract new investors if Vietnamese equities continue to perform well. However, the substantial unit redemptions, high expense ratio, and sector/stock concentration raise questions about the ETF’s future growth and resilience to market shocks. Investors should closely monitor developments in Vietnam’s property and financial sectors, as well as any changes in Vietnamese currency and regulatory policy, as these factors could drive volatility in the ETF’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research and consult with professional advisors before making investment decisions.

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