Vietnam’s infant fund management industry holds great growth potential in 2025: exec

Vietnam’s young fund management industry has significant growth potential this year despite global uncertainties, particularly U.S. President Donald Trump’s tariff policies, said Nguyen Hang Nga, general director of Vietcombank Fund Management Company Limited (VCBF).

As of end-September 2024, Vietnam had 117 investment funds, an increase of 10 from late 2023. This total included 64 open-ended funds, 16 exchange-traded funds (ETFs), 34 member funds, and three closed-end funds, Nga explained during an episode of the ongoing weekly Finance Street Talk Show on national broadcaster VTV8.

The value of open-ended funds doubled year-on-year to VND53 trillion ($2.08 billion) in 2024. By the end of the year, approximately 393,000 investors had joined open-ended funds, a 54% increase from 2023, she added.

However, the fund management industry is still in its early stages, with newly opened funds accounting for only 0.4% of the country’s population of over 100 million. Additionally, the industry’s size remains under 0.5% of GDP.

While the total value of the fund management industry is equivalent to 7% of GDP, up to 90% of managed assets come from investment trusts. Of these, 85% of the trust value comes from insurance companies, and 80% from bonds and deposits, Nga noted.

Despite market volatility, many investment funds have outperformed the VN-Index, Vietnam’s benchmark index. Notably, 14 open-ended stock funds recorded profits exceeding 20%.

Although global uncertainties persist, including tariff and other policy changes under U.S. President Donald Trump, the VCBF chief forecasted strong growth momentum for Vietnam’s economy this year.

Nga predicted that VN-Index enterprises could see a 16.6% year-on-year earnings increase in 2025, following an 18.1% rise in 2024. She also projected a P/E ratio of 10, an attractive level for investors.

Additionally, Nga anticipated that FTSE may upgrade Vietnam’s stock market to secondary emerging market status this year, potentially attracting $1 billion in capital inflows from passive funds tracking the FTSE Emerging Markets Index.

In the long term, Vietnam has great opportunities for rapid growth over the next 10-15 years. Factors such as supply chain diversification, the shift in chip manufacturing, AI-driven production advancements, and supportive government policies are expected to fuel the country’s economic expansion, Nga indicated.

Given this optimistic economic outlook, the stock market is poised to benefit, with open-ended funds likely to become the most attractive channel for investors to join the local stock market, she stressed.