Did you know? Vietnam might be the underappreciated growth engine your portfolio needs.
A pivotal shift is underway in Vietnam’s markets.
This month FTSE Russell confirmed plans to reclassify Vietnam from frontier to emerging market status effective September 2026. This reclassification marks a significant milestone for Vietnam, reflecting the country’s rapid market development in recent years.
Chart 1: Total stock market capitalisation ($bn)
Source: BofA Global Research, SSC, Haver. Note: HOSE = Ho Chi Minh Stock Exchange; HNX = Hanoi Stock Exchange UPCoM = Unlisted public company market.
Graduating to emerging market status unlocks Vietnam to a broader base of institutional capital and index-linked flows. Brokers put this number upwards of US$10bn in flows or nearly 5% of free float. Importantly, beyond the initial index entry, being a constituent of the EM index, rather than a frontier market only, will compel many more funds to consider Vietnam as a serious investment opportunity.
Table 1: Estimated flows into Vietnam following FTSE reclassification (US$m)
Source: HSBC estimates.
Vietnam’s stock market has performed well in 2025. The benchmark Ho Chi Minh Stock Index has surged ~35% year-to-date, reaching record highs following the FTSE announcement as confidence builds in the country’s investment appeal.
Chart 2: Ho Chi Minh Stock Index performance
Source: Jefferies, Bloomberg.
The real story, though, is domestic.
Vietnam’s macro story is especially attractive. In the short term, the economy remains buoyant. In Q3 2025, Vietnam’s GDP climbed over 8% year-over-year, one of its strongest quarterly prints in years. Meanwhile, credit growth of nearly 20% YoY is fuelling strong domestic investment and commercial activity.
Chart 3: Credit growth and Ho Chi Minh Stock Index movements
Source: NSO, SBV, CEIC Data, HSC Strategic Market Research.
With a youthful and urbanising population, rising incomes, expanding financial inclusion, and a proven industrial base, the long-term structural angle of Vietnam is appealing. When we visited Vietnam some months ago, the country reminded us of China in the 1990s. GDP per capita in Vietnam was under US$5,000 in 2024. The Vietnamese economy is well positioned to grow strongly in coming years.
Why does this matter for investors?
Analysts project 2026 earnings growth could reach ~25%, among the highest growth predicted across all Asian markets, if not the entire global market.
Chart 4: 2026E EPS growth and P/E valuation for EM Asia
Source: J.P. Morgan, Bloomberg Finance L.P. Consensus estimates, data based on MSCI indices.
With improving liquidity, growing market participation, multiple structural tailwinds converging – and market valuations at an attractive ~11x forward P/E – Vietnam is stepping out of the frontier market shadows. It is evolving into an exciting long term investment opportunity for global and emerging markets investors.
Chart 5: Ho Chi Minh Stock Index performance and P/E ratio
Source: Bloomberg.
At Ox Capital Management, we are investing in leading Vietnamese firms with attractive valuations, seeking to capture this structural transformation. For those targeting strong long term growth opportunities, Vietnam’s macro strength, reform trajectory and market dynamics make it one of the most compelling stories in emerging markets today.
At Ox Capital, we are focused on quality companies with long term growth which are available at inexpensive valuations across emerging markets. Current valuations are providing lots of interesting opportunities. Let us know if you would like to understand specifically where we are finding the opportunities!
Important Information: This material has been prepared by Ox Capital Management Pty Ltd (Ox Cap) (ABN 60 648 887 914) Ox Cap is the holder of an Australian financial services license AFSL 533828 and is regulated under the laws of Australia. This document does not relate to any financial or investment product or service and does not constitute or form part of any offer to sell, or any solicitation of any offer to subscribe or interests and the information provided is intended to be general in nature only. This should not form the basis of, or be relied upon for the purpose of, any investment decision. This document is not available to retail investors as defined under local laws. This document has been prepared without taking into account any person’s objectives, financial situation or needs. Any person receiving the information in this document should consider the appropriateness of the information, in light of their own objectives, financial situation or needs before acting. This document is provided to you on the basis that it should not be relied upon for any purpose other than information and discussion. The document has not been independently verified. No reliance may be placed for any purpose on the document or its accuracy, fairness, correctness, or completeness. Neither Ox Cap nor any of its related bodies corporates, associates and employees shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the document or otherwise in connection with the presentation.