Have you ever watched an entire region of the investment world quietly catch fire while most people were still staring at the usual suspects?
That’s exactly what’s been happening in Vietnam this year. While headlines obsessed over China’s sluggish recovery or India’s premium valuations, the Vietnamese stocks have been on an absolute tear – and almost nobody outside the country seems to have noticed yet.
The Numbers Don’t Lie – Vietnam Is Outperforming Everyone
Let’s start with the scoreboard, because it’s honestly stunning.
The VN Index – Vietnam’s main benchmark – is up roughly 38% year-to-date as of December 2025. The VanEck Vietnam ETF (VNM), the easiest way most international investors can get exposure, has rocketed 62% in the same period. For context, the iShares MSCI China ETF is up around 31%, and the broad emerging-markets ETF (EEM) sits at about 30%.
In other words, Vietnam isn’t just keeping pace with the emerging-market rebound. It’s lapping the field.
“Vietnam is truly moving on its own. There’s so much more in emerging markets than China right now.”
– Thea Jamison, Managing Director at Change Global Investment
A Rally Built on Domestic Muscle, Not Foreign Hot Money
Here’s what makes this run feel different from past emerging-market flares: it’s almost entirely home-grown.
Vietnam’s retail investor base has exploded in recent years. Average daily trading value has occasionally topped $2 billion in 2025 – mind-blowing liquidity for a frontier market. And unlike many past rallies in the region, foreign investors have largely sat on the sidelines.
That’s actually a good thing. When a market can rally this hard without relying on fickle overseas flows, it tends to be healthier and more sustainable.
- Local brokers report millions of new trading accounts opened since 2022
- Retail participation now routinely exceeds 85-90% of daily volume
- Valuations remain reasonable – forward P/E around 12-13x versus 18x+ for India
The Upgrade That Could Change Everything
If you thought 2025 was exciting, wait until September 2026.
FTSE Russell has already confirmed that Vietnam will be reclassified from frontier to secondary emerging market status effective September 21, 2026. That single event is expected to unlock $5-6 billion in passive inflows alone as big index-tracking funds are forced to buy Vietnamese shares.
And that’s probably a conservative estimate. MSCI is widely expected to follow suit within 12-24 months afterward, which would open the floodgates even wider.
“Achieving emerging market status is a milestone, but the harder part is keeping it. That will require deeper reforms and broader sector participation.”
– Thu Nguyen, Head of Investments at VinaCapital
Yes, It’s Still Heavily Concentrated – But That’s Changing
One criticism you’ll hear is that the rally has been narrow. Strip out the “Vin” family (Vingroup, Vinhomes, Vincom Retail) and the index gain drops from 38% to roughly 10%. Fair point.
But look closer and you see the breadth improving every quarter. Banks like Vietcombank, Techcombank, and VPBank have started to participate strongly. Consumer names, tech, and even some industrials are waking up. The real estate concentration is high, but new IPOs in tech and consumer sectors are in the pipeline for 2026-2027.
Earnings growth is forecast at 15%+ for 2026, which at current valuations could easily translate into 15-20% market returns even without multiple expansion.
The Cranes Are Working – This Isn’t Just a Stock Story
Walk around Ho Chi Minh City or Hanoi today and you can’t miss it: construction cranes everywhere. The economy is visibly shifting into higher gear.
Foreign direct investment disbursed in the first ten months of 2025 hit $21.3 billion – the highest January-October figure in half a decade. Samsung, Intel, Lego, Amkor, and dozens of others keep expanding factories. Apple suppliers are moving production lines. The “China +1” trade has turned into “China + Vietnam” in many boardrooms.
A young, inexpensive, and increasingly skilled workforce is a huge part of the draw. Vietnam still enjoys a demographic dividend that China lost years ago, and the government is pouring money into vocational training and digital skills.
Structural Reforms Are Finally Happening
The Communist Party’s Resolution 68 in May 2025 was a game-changer. It promises to slash red tape for private companies, improve access to land and capital, and generally make life easier for entrepreneurs.
They’re even amending the Land Law again (effective 2024, but still being fine-tuned) to make it easier to convert agricultural land for industrial or residential projects. Anyone who has tried to develop anything in Vietnam knows how big a bottleneck that has been.
Add in the removal of pre-funding requirements for foreign investors and a host of smaller regulatory wins, and you start to understand why confidence is sky-high.
Trade Headwinds? More Like Tailwinds
Everyone worried about Trump’s reciprocal tariffs, and rightly so – Vietnam runs a huge trade surplus with the U.S.
But Hanoi moved fast. By July they had negotiated a deal that caps tariffs at 20% on most goods – far better than the original 46% threat – and secures zero tariffs on some categories. Compared to neighbors, Vietnam actually gained competitive edge on cost of labor, land, and power combined.
Meanwhile, Vietnam is busy signing or upgrading trade agreements with the EU, UK, Israel, UAE, and others. They’re not putting all their eggs in any one basket anymore.
How Can Regular Investors Actually Play It?
Options remain limited, but they exist.
- VanEck Vietnam ETF (VNM) – the cleanest, most liquid way. $580m AUM, 0.68% expense ratio
- Individual ADRs like Vingroup (VICCY) or Vietcombank, though liquidity is thin
- Some global emerging-market funds have increased weightings dramatically this year
- Wait for 2026-2027 when direct local accounts become easier post-upgrade
Successful investing is about managing risk, not avoiding it.
