Vietnam’s economy is growing at around 10%, foreign investment is at record levels, and the government is spending heavily on infrastructure.
These structural tailwinds highlight the opportunity in Vietnamese stocks, which trade at a discount to both historical averages and Southeast Asian peers. Craig Martin, executive chairman of Dynam Capital, which manages the London-listed Vietnam Holding, calls it a coiled spring: well valued, growing, and waiting for potential pools of capital to be released.
Vietnam’s economic growth
Exports of computers, electronics and phones are up around 60% year on year, as Vietnam takes the lion’s share of the China-plus-one shift in global supply chains. Most of what it ships to the US is tariff-free, and Martin says trade tensions have not dented foreign investment.
A formal US deal could come before long.
In terms of the AI boom, Vietnam does not make AI chips, but it assembles, packages and tests them, and supplies engineering talent to Japanese and American firms. Speaking at a recent UK Investor Magazine event, Craig Martin said he sees Vietnam as a picks-and-shovels play that also offers diversification from an emerging markets index dominated by Taiwanese and South Korean AI stocks.
Domestically, 100 million young, digitally confident consumers are moving from traditional markets to modern shops and online retailing apps. The weak spot has been inflation, driven partly by imported oil, which has pushed up interest rates. But as we’ve seen this week, these constraints could prove transitory if oil prices fall back.
FTSE Russell emerging market status
After eight years on the watch list, FTSE Russell promoted Vietnam to emerging market status this autumn. Index funds are buying in stages. Vanguard has signalled roughly $2.5bn to $3bn, of which only 10% arrived in September. A further 20% is set to follow in March, with the rest in June and September 2027.
So far the effect has been offset by foreign selling, with investors spending two and a half years chasing AI stocks elsewhere.
The expectation is that the tranches will be felt through 2027, particularly if global rates fall and active managers follow the index money.
Possible MSCI inclusion within a couple of years, and a sovereign upgrade to investment grade, would bring a further wave. In the meantime, a broad emerging markets fund offers little exposure, as Vietnam is less than 1% of the index.
What is in the Vietnam Holding portfolio?
Vietnam Holding owns 25 companies and trades at 8.7x 2027 earnings, which is lower than the market and underlines the value in the portfolio. But as we’ve discussed above, Vietnam is a growth story, and this value comes with 18–20% earnings growth this year.
About a third is in banks, led by MB Bank, a digital leader with 40 million online customers trading at 5.5x earnings. The largest holding is retailer Mobile World on 8.8x, and the third is the country’s dominant steelmaker on under seven times. FPT remains in the portfolio after profit-taking.
The fund avoids the index’s largest constituent, a conglomerate that makes up 21% of the market but trades at around 75x earnings and carries high debt. It uses no gearing, holds only listed shares and is the only London-listed Vietnam fund offering an annual exit at NAV, which 14.6% of shareholders used this year.
The fund is down about 10% in 2026, trimming its 15-year annual return to 10–11%. But the investment case remains intact: a fast-growing economy, an attractively valued portfolio, and a potential wave of capital due over the next twelve months.