Vietnam's stock market status upgrade to be strong boost for fund industry

An upgrade of Vietnam’s stock market status from “frontier” to “emerging” will have positive impacts on the market in general and the fund industry in particular, according to regulators and investment funds.

The market on Thursday received a series of positive updates related to market status upgrade prospects.

Notably, the central counterparty clearing house (CCP) mechanism is expected to be officially implemented in the first quarter of 2027 for the underlying stock market. The CCP is considered a key long-term factor for Vietnam’s stock market to achieve a status upgrade.

On the same day, during a meeting with Minister of Finance Nguyen Van Thang, representatives of the FTSE Russell working group expressed their impression of Vietnam’s comprehensive reform efforts aimed at improving capital market operations.

Since the term "upgrade" first appeared in early 2017, the Vietnamese stock market has never been closer to the upgrade threshold than it is now.

According to regulators and investment fund leaders, an upgrade to "emerging" market status in FTSE Russell’s September 2025 Review would bring significant positive effects to the Vietnamese stock market and fund industry.

Speaking on the sidelines of the seminar "Raising investor awareness towards stock market status upgrade" hosted by The Investor on Thursday, Bui Hoang Hai, vice chairman of the State Securities Commission (SSC), highlighted two key benefits that fund management companies in Vietnam would enjoy if the domestic stock market status is upgraded.

Specifically, an upgrade would help the Vietnamese market attract more foreign investment funds. Hai believed this would be a major driving force for the growth of the domestic fund industry, as foreign funds would bring valuable experience and technology, and help elevate local fund management capabilities.

Additionally, he noted that the upgrade would draw more attention from foreign investors, providing further growth opportunities for the local fund industry.

Hai also emphasized the need to diversify fund products and consider offering more incentives for investment through fund products.

Sharing the same view, Thieu Nhat Le, CEO of UOB Asset Management (UOBAM), stated that a stock market status upgrade would largely boost both the market and the fund management industry.

“When upgraded, exchange traded fund (ETF) and foreign capital flows will automatically be reallocated to Vietnam’s stock market. These passive inflows are relatively large, but active fund flows are even larger. We can see that foreign capital acts as a ‘guiding star’ for domestic retail investors. Therefore, an upgrade will positively impact both the overall market and the fund industry,” Le commented.

Promoting the development of the fund industry was a key topic at the seminar. Do Ngoc Quynh, secretary general of the Vietnam Bond Market Association, emphasized that one of the critical issues for advancing the fund industry is creating an open, transparent, and fair playing field. This allows capable players to compete fairly with the less capable to be eliminated, thereby improving the overall quality of the industry.

“The foundation of the fund management market lies in licensed fund management companies that offer high-quality investment products. Investors ultimately seek profits, so the more effective and profitable a product is, the more attractive it becomes. It’s important to emphasize that profits and performance go hand-in-hand with risk appetite,” said Quynh.

He also pointed out that a crucial factor for sustainable market development is investor confidence. This comes from transparency, fairness and strictness in the legal system, and professionalism in the implementation by regulators and market participants.

The VN-Index, which tracks the performance of the Ho Chi Minh Stock Exchange (HoSE), closed Thursday at 1,490.01 points, up 14.54 points, or 0.99%, from the previous session.

Trading value on the bourse hit nearly VN35.7 trillion ($1.37 billion), an increase of VND2.8 trillion day-on-day.