Trillion-dollar funds eye Vietnam market after FTSE upgrade: securities regulator

State Securities Commission chairwoman Vu Thi Chan Phuong said several large international investors were in discussions with regulators about opening accounts in Vietnam following the market's reclassification to secondary emerging-market status.

FTSE Russell announced in October 2025 that Vietnam met all criteria for the upgrade, citing reforms in regulation, market access, and trading infrastructure.

Vietnam launched the KRX trading system last year to improve transaction capacity and align the market with international standards, Phuong said.

She said the regulator's priority was to safeguard market stability while managing foreign capital flows and improving the quality of listed companies.

Vietnam's equity, bond, and derivatives markets all expanded in 2025, she said, with stock market capitalization rising about 35 percent from the end of 2024 to roughly 92 percent of gross domestic product.

The benchmark VN-Index gained about 40 percent during the year, supported by strong trading volumes and a rising number of retail investors, which exceeded 11.6 million accounts, she added.

In 2026, authorities will focus on legal reforms, product expansion, infrastructure upgrades, and stricter market supervision, Phuong said.

Foreign investors were net sellers in Vietnam in 2025, with outflows totaling about VND131 trillion (US$5.2 billion), according to SSC vice-chairman Bui Hoang Hai.

However, the trend reflected global portfolio rebalancing rather than reduced confidence in the market.

Foreign investors' total holdings in Vietnam still rose to an estimated $51 billion by the end of October 2025, accounting for about 14 percent of the market capitalization.

Hai cited data showing foreign investors were net buyers in the United States and Europe in 2025, while selling across several emerging and frontier markets, including India and Southeast Asia.

The SSC is working to complete remaining reforms ahead of FTSE Russell's next market review in March 2026.

Hai said regulators expected active foreign inflows to emerge as investors position ahead of Vietnam's formal inclusion in emerging-market indices.