Foreign funds charmed by Vietnamese stocks
After a stellar 2024, foreign funds continue to show optimism about the growth of the Vietnamese stock market in 2025.

VN-Index closed 2024 at 1,266.78 points, up 12.1% against the beginning of the year. Photo by The Investor/Trong Hieu.
Impressive performance in 2024
Foreign funds investing in Vietnamese stocks had a successful 2024, with impressive performance figures. A notable example is VinaCapital’s VinaCapital Modern Economy Equity Fund (VMEEF), which posted a return of 27.45%.
Other VinaCapital funds also showed positive results, including VinaCapital Equity Opportunity Fund (+18.69%), VinaCapital Equity Special Access Fund (+17.51%), and VinaCapital Insights Balanced Fund (+14.63%).
Apart from VinaCapital funds, there were Dragon Capital’s Dynamic Securities Fund (+19.78%) and DC Dividend Focus Equity Fund (+13.97%). Similarly, another major player, Pyn Elite Fund from Finland, reported a return of 21.79%.
Vietnam’s stock market lauded
Le Anh Tuan, chief investment officer at Dragon Capital, believed that the current valuation of Vietnam’s stock market does not fully reflect the potential for its status upgrade. The price-to-book ratio of the VN-Index for 2025 is projected to be at its lowest level in the past 10 years so the market’s valuation is quite attractive, he noted.
The Dragon Capital executive also forecast a 70% chance that the market will have its status upgraded from “frontier” to “emerging” in March 2025. Among the nine criteria for a status upgrade set by Russell, Vietnam has yet to meet two criteria: clearing and settlement, and the DvP (delivery versus payment) cycle, he said, adding he is optimistic that the new trading system KRX, with its clearing and settlement system, will make progress in 2025.
"With high expectations for growth and movements in the economy, a strong investment cycle is gradually becoming evident," Tuan said.
Meanwhile, Pyn Elite Fund maintains its long-term view that the VN-Index could reach 2,500 points. In 2021, the Finnish fund projected that the index would reach 2,500 points, but after four years, the main index has still not touched that level.
Pyn Elite Fund stated that this outlook is based on good profit growth in the coming years and a market P/E (price-to-earnings) ratio of 16. The fund also predicted that this ratio will drop to 10.1 by 2025, as profits of listed stocks in Vietnam continue to grow.
Forecasting the stock market capitalization will be equivalent to 57% of GDP by 2025, the fund even believed that in a growing economy, the figure could reach nearly 100%.
Michael Kokalari, chief economist at VinaCapital, assessed that concerns over tariffs under the new U.S. President Donald Trump, combined with slower export and GDP growth, could affect the VN-Index and the value of the VND in the first half of 2025.
However, in the second half, Vietnam’s GDP growth is expected to accelerate if the Government implements strong measures to support the economy, and the pressure on the VND/USD exchange rate could ease, along with diminishing concerns about President Trump’s impact on Vietnam, he noted.
VinaCapital views the decline in the stock market as an opportunity to buy stocks, especially since the market’s valuation remains attractive with a projected P/E ratio of 12x, compared to a projected EPS (earnings per share) growth of 17%.
Additionally, the fund expects foreign capital to return to the Vietnamese stock market in 2025 when there is clear information that President Donald Trump's tariff policy will not target Vietnam.
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