Banks entice youth with tech advances

The rising number of millionaires and expanding base of young investors under 30 in Vietnam are expected to provide strong support for the domestic stock market, according to Nguyen Ba Huy, investment director at SSI Asset Management.

“For wealthy individuals looking to preserve and grow their assets over the long term, professional fund management is the inevitable choice,” Huy said during a conference last week on investment trends in Ho Chi Minh City.

“Young investors under 30 are particularly open to new products and technologies. Even with small investments, they value the ability to save through professional funds,” he added. “As Vietnam’s stock market is anticipated to be upgraded from frontier to emerging market status next year, young investors are expected to show even greater enthusiasm for market opportunities.”

Nguyen Thi Thu Hien, CEO of Techcombank Securities (TCBS), pointed to Vietnam’s golden demographic advantage as a unique opportunity for the stock market.

“Recent trading volumes have reached billion-dollar levels, driven largely by young investors,” she explained. “Leveraging this youthful demographic to grow the stock market has become a priority for regulators and brokerage firms. Young investors are a tremendously powerful force.”

Hien reported that in the first half of 2024, 56 per cent of new individual accounts at TCBS were opened by investors under 30. “Gen Z investors are enthusiastic and quick learners. While they may lack initial financial knowledge, their technological fluency allows them to quickly navigate the investment landscape using our digital platforms,” she said.

Hien added that TCBS has integrated generative AI to enhance the experience, aligning with Gen Z’s preference for engaging, tailored digital interactions.

On the other hand, despite positive fund performance in 2024, assets under management (AUM) for exchange-traded funds and other funds remain modest in Vietnam.

According to the State Securities Commission, by the end of 2023, AUM across open-ended funds, index funds, and separate accounts stood at around $26.8 billion - just 2.4 per cent of Vietnam’s GDP, compared to 10-30 per cent in regional peers like Thailand and Malaysia.

Ngo The Trieu, CEO and CIO of Eastspring Investments Vietnam, attributed this to Vietnam’s relatively young fund management market.

“The market is still in its early stages, with most growth happening in the last decade,” he explained. “While a strong legal framework is in place to protect investors, building investor trust will take time.”

Trieu also observed that the fund market in Vietnam needs time for retail investors to understand fund management, as has happened in markets like South Korea, China, and Taiwan.

While discussing the potential for passive investment growth, Trieu also expressed optimism about rising demand for professional asset management.

“The high rate of retail participation means many investors lack the expertise to manage assets effectively, leading to significant losses during market volatility,” he explained. “If Vietnam’s macroeconomic stability continues, the fund market could see significant growth over the next 3-5 years. The challenge will be for fund managers to position themselves to seize these opportunities.”

Trinh Quynh Giao, CEO of PVI Asset Management, meanwhile, highlighted the need for trust from both supply and demand.

“Fund managers need to strengthen their capabilities and diversify products,” she said. “On the demand side, rising incomes and improved financial literacy will drive investment demand. We expect a surge in demand as Vietnam’s GDP per capita approaches $5,000 by 2025.”

Giao also noted the importance of financial education and a stronger advisor network.

“We’re working with the State Securities Commission and media, but there’s a shortage of qualified financial advisors,” she said. “Fund managers rarely have direct contact with retail investors, except for high-net-worth individuals. A capable advisor network is crucial for aligning investor goals with risk tolerance.”

A UOB survey released earlier this month offered further insights into Vietnam’s investor landscape. Conducted among 5,000 respondents across Southeast Asia - including 1,000 from Vietnam - the survey indicates that nearly 60 per cent of Vietnamese consumers set aside at least three months’ worth of expenses for emergencies, above the regional average of 54 per cent. Almost half of Vietnamese respondents save over 20 per cent of their monthly income.

Vietnamese consumers also show a strong interest in investments, with 63 per cent allocating over 10 per cent of their annual income to investments, surpassing the regional average of 53 per cent. The survey additionally revealed that Vietnamese consumers are the most optimistic about their country’s economic prospects compared to those in neighbouring nations.

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