There is good reason to anticipate that the net selling trend among foreign investors will soon come to an end, paving the way for Vietnam’s stock market to welcome a return of foreign capital inflows and a shift back to net buying in 2026.

ETFs experience slight net outflows Equity ETFs in emerging markets attracted US$26 billion in net inflows in December 2025 (+31%), capping the year with an uninterrupted four month streak of net inflows and bringing the annual total to US$115 billion, according to a report by VnDirect Securities Corporation. Chinese equity ETFs stood out, drawing US$12.7 billion in December (a 563.5% surge from November), marking their fourth consecutive month of net inflows amid easing tariff tensions between the U.S. and China. Following a similar trend, equity ETFs in developed markets recorded US$166 billion in net inflows in December 2025 (+84.7%), contributing to a full year total of US$965 billion. This surge occurred against the backdrop of several developed market stock indices reaching new highs, including the S&P 500 (+17.5%), Dow Jones Industrials (+13.4%), Nikkei 225 (+28.1%), FTSE 100 (+20.2%), and Euro Stoxx 50 (+17.8%). The U.S. led the way, attracting US$134.6 billion in December alone, supported by further interest rate cuts from the Federal Reserve and strong growth momentum in artificial intelligence (AI), which channeled capital flows into technology companies. In Southeast Asia, ETFs across several countries once again recorded net capital inflows in December 2025. Indonesia led the region with US$72 million, followed by Singapore (US$44 million), Malaysia (US$12 million), the Philippines (US$7 million), and Thailand (US$2 million). For the full year, Singapore stood out with the largest net inflows of US$598 million, supported by tax incentives aimed at strengthening its stock market. Notably, the preferential 5% tax rate on income from fund management and investment consulting fees—well below the standard corporate income tax rate of 17%—has boosted after tax profits and attracted more fund management companies to Singapore. In contrast, ETFs in Vietnam experienced net outflows totaling US$2 million in December 2025, primarily driven by the Fubon FTSE Vietnam ETF (VND619 billion in net outflows) and the Xtrackers FTSE Vietnam ETF (VND26 billion). Meanwhile, the VanEck Vectors Vietnam ETF, DCVFMVN Diamond ETF, and DCVFM VN30 ETF posted net inflows of VND315 billion, VND145 billion, and VND63 billion, respectively. Overall, ETFs investing in Vietnam’s domestic stock market registered cumulative net outflows of approximately VND12.2 trillion for the year—24.1% lower than in 2024. Expectations for a reversal in 2026 Foreign investors in Vietnam’s stock market returned to net buying in December 2025, with total purchases amounting to around VND1.7 trillion, ending a four month streak of net selling. Most industry groups saw foreign investors as net buyers, led by banking and financial services, which recorded net purchases of over VND2.2 trillion and VND1 trillion, respectively. MBB shares topped the list with net buying of VND2.3 trillion. In contrast, the real estate sector came under profit taking pressure, suffering more than VND6.3 trillion in net selling, with VIC shares the most heavily offloaded (–VND4.2 trillion). The evolution of key macroeconomic indicators helps explain why foreign investors returned as net buyers. The U.S. Dollar Index hovered around 98 points before gradually rising to 100 in December 2025, representing a 9.4% decline from the start of the year. Meanwhile, the Federal Reserve cut interest rates three times—in September, October, and December—bringing its policy rate down to 3.5–3.75%. Domestically, the State Bank of Vietnam implemented flexible management measures, including enhanced open market operations and U.S. dollar forward contracts. These actions quickly eased exchange rate pressures in the final months of 2025, reducing risks for foreign investors when making disbursement decisions. Regionally, foreign investors also shifted toward net buying in several Southeast Asian markets in December, with Indonesia leading at US$732 million, followed by Thailand at US$190 million. Conversely, Malaysia and the Philippines saw net selling of US$502.2 million and US$221.7 million, respectively. For the full year of 2025, many Southeast Asian markets once again suffered net outflows of foreign investment, as tariff uncertainties in the United States prompted capital to exit several developing economies. Malaysia recorded the largest net selling value at approximately US$4.9 billion, followed by Vietnam (US$4.8 billion), Thailand (US$3.1 billion), Indonesia (US$907 million), and the Philippines (US$873.9 million). Looking ahead, the Federal Reserve is expected to cut interest rates two more times in 2026, lowering the federal funds rate to 3–3.25% per annum. As a result, the U.S. Dollar Index is projected to remain subdued, easing pressure on the exchange rate between the greenback and the dong. Beyond macroeconomic factors, Vietnam’s official upgrade by FTSE to secondary emerging market status—effective September 2026—marks a significant milestone. This reclassification is anticipated to trigger substantial foreign capital inflows into the domestic stock market. Accordingly, there are solid grounds to expect the net selling trend among foreign investors will soon end, with Vietnam’s market poised to welcome a return to net buying in 2026.