The Best Funds to Buy as Vietnam Evolves

Why It Matters

Reclassification will channel new foreign capital into Vietnam, amplifying returns for funds already positioned in high‑growth sectors. The banks‑centric model and private‑market tilt give investors amplified exposure to the country’s rapid structural transformation.

Key Takeaways

• FTSE to reclassify Vietnam as emerging market 2026
• Bank credit equals 145% of GDP, ROE 17‑18%
• VEIL, VNH, VOF trade at 15%, 7%, 23% NAV discounts
• VOF adds private holdings in healthcare, tech, renewables
• Mobile World Investment Corp is largest fund holding (10%)

Pulse Analysis

Vietnam’s macro backdrop is increasingly attractive to global investors. Over the past decade the country has outpaced many peers, thanks to a strategic pivot from low‑cost manufacturing to higher‑value exports, a government‑backed investment surge, and a rapidly expanding middle class. The upcoming FTSE Russell upgrade from frontier to emerging market status in September 2026 is set to lift institutional constraints, prompting both passive trackers and active managers to allocate fresh capital, which could accelerate market depth and liquidity.

Banking remains the engine of Vietnam’s growth, with credit extending to 145% of GDP—a stark contrast to under‑developed bond and equity markets. This leverage translates into return‑on‑equity figures of 17‑18%, nearly double the regional average, making banks an “amplified growth proxy.” Funds such as VEIL allocate roughly half of their assets to financials, while VNH leans toward mid‑cap consumer and industrial stocks, with Mobile World Investment Corp topping holdings at 10%. These positions capture the domestic consumption boom and urbanisation trends that underpin the country’s long‑term trajectory.

Fund pricing also presents a compelling entry point. VEIL, VNH and VOF currently trade at discounts of 15%, 7% and 23% to net asset value, aligning with five‑year averages and offering a margin of safety. VOF distinguishes itself by blending public equities with seven private‑market stakes in nascent sectors like healthcare, technology and renewable energy—areas that remain thinly covered on the public index. While geopolitical shocks such as the Middle East crisis have introduced short‑term volatility, the structural shift toward a higher‑value economy suggests that these discounts may widen as new inflows arrive post‑reclassification, delivering attractive upside for patient investors.