The world’s second-largest asset management firm, overseeing assets worth $8.6 trillion, is considering investing in Vietnamese stock market.
If Vietnam’s market is upgraded to emerging market status, member ETF funds from this firm could inject hundreds of millions of USD into the country.
Related: Here’s how to invest into Vietnamese market as foreign investor
In a significant regulatory move, the Vietnamese Ministry of Finance has approved Circular 68/2024/TT-BTC, which will take effect on November 2, 2024. This circular allows foreign institutional investors to purchase stocks without the need for full funds when placing orders. This change not only reduces financial costs and increases flexibility for investors but is also seen as a crucial step toward upgrading Vietnam’s market to Emerging Market status under FTSE Russell standards, according to a comment by Mirae Asset Securities.
Mirae Asset predicts that after the upgrade, Vietnam will have a 0.6% weight in the FTSE Emerging Markets Index, which could attract more than $500 million in investment just from ETFs tracking this index. The Mirae Asset research team also suggests that additional foreign capital could flow into Vietnam from funds beyond those tied to the FTSE Emerging Markets Index, further boosting market liquidity.
One notable ETF expected to invest in Vietnamese stocks is the Vanguard FTSE Emerging Markets ETF, with assets under management (AUM) nearing $79 billion. This fund alone is projected to contribute around $474 million to the Vietnamese market.
Vanguard Group, which manages the Vanguard FTSE Emerging Markets ETF, is the second-largest asset management company globally, with an AUM of $8.6 trillion in 2024, second only to BlackRock.
In a related development, BlackRock’s iShares Frontier and Select EM ETF, which once held the largest allocation of Vietnamese stocks, has completed its exit from the market. The ETF had 28% of its $425 million portfolio invested in Vietnam before BlackRock decided to close the fund in early June. Since then, the fund has been actively liquidating its assets in the Vietnamese market.
Related
Source: Vietnam Insider