Vietnam’s fund industry seeks stronger growth momentum

The conference introduced the benefits and methods of investing through funds as part of efforts to improve investor knowledge and professionalism, under the SSC’s investor education and training project pursuant to Decision No. 722/QD-UBCK dated September 2025, and the Ministry of Finance’s project to restructure the investor base and develop the securities investment fund industry under Decision No. 3168/QD-BTC dated September 2025.

The push comes as Vietnam’s fund industry has expanded rapidly but remains relatively small compared with other markets in the region.

Speaking at the conference, Nguyen Cong Minh, head of the Department of Fund Management Companies and Securities Investment Funds Regulation under the SSC, said Vietnam currently has 43 fund management companies and 142 securities investment funds, including 106 public funds.

Total assets under management (AUM) reached approximately $33.8 billion at the end of June 2026, up nearly 6.8 times from $5 billion at the end of 2015, with average annual growth of more than 20 per cent over the past decade.

Yet the industry’s scale is equivalent to only around 6 per cent of GDP, well below 31 per cent in Thailand, 56 per cent in Malaysia, 57 per cent in China, and 84 per cent in South Korea.

“The figures point to significant room for the fund industry to expand, particularly as Vietnam seeks to develop a more balanced capital market and reduce reliance on bank credit,” said Minh.

For Minh, developing the fund industry is closely linked to reshaping the investor base. A sustainable capital market cannot rely excessively on retail investors and short-term capital flows, while investment funds, pension funds, insurers and other long-term institutional investors can provide more stable sources of capital and contribute to stronger corporate governance and greater market professionalism.

This direction is also reflected in Decision No. 1413/QD-TTg, issued by the Prime Minister on July 27 on the comprehensive reform of Vietnam’s financial market, which places emphasis on developing a sustainable investor base and increasing the role and market share of institutional investors.

The conference explored opportunities to expand fund investment and mobilise longer-term capital. Photo: SSC

The opportunity is becoming more significant as Vietnam’s stock market moves towards greater international accessibility.

Nguyen Thi Hang Nga, CEO of VCBF, views Vietnam’s market upgrade as more than an opportunity to attract additional foreign capital, describing it as recognition by international institutions of the market’s development and quality.

Estimates cited by Nga indicate that Vietnam could attract around $2 billion from investment funds once it is included in appropriate indices. “Foreign investors currently account for only around 10 per cent of the domestic stock market, leaving considerable room for international participation,” she said.

“However, market reclassification alone will not guarantee sustained international capital inflows, particularly from active funds. The next challenge is to ensure that Vietnam’s market offers a sufficiently broad range of high-quality investment opportunities.”

Nga pointed to the structure of Vietnam’s stock market as one of the challenges to attracting more active investment funds, noting that banking, securities and real estate account for a large share of market capitalisation and liquidity. This concentration limits the range of investment opportunities available to funds seeking companies with stronger long-term growth potential.

“A beautiful market is only a necessary condition. The market must also offer quality investment opportunities,” Nga said, adding that international investors generally have a positive view of Vietnam’s macroeconomic outlook but can find it more challenging to identify individual companies capable of delivering sustainable long-term growth.

For passive funds, index inclusion and the weighting of individual stocks remain critical considerations, while active funds place greater emphasis on corporate quality, management capabilities, growth prospects, cash generation and valuation. Expanding the range and quality of listed companies would therefore be important to attracting and retaining more sophisticated institutional capital.

The opportunity also extends to domestic investors, with fund products still relatively underused in household financial planning despite the growing complexity of financial markets. Many individual investors lack the time, expertise or resources to select stocks, analyse financial statements and manage portfolios themselves, creating scope for professional fund managers to channel household savings into diversified, professionally managed investments.

Ha Anh Tung, deputy director of the Business Division at MB Capital, said that rising financial sophistication among domestic investors was creating favourable conditions for the fund industry. Investors are increasingly paying attention to financial planning, asset allocation and risk appetite, with greater emphasis on balancing returns and safety rather than pursuing short-term market movements.

“Digitalisation could accelerate this transition by lowering barriers to fund investment. Digital account opening and identification, fund certificate distribution, portfolio management, performance monitoring and risk management could make fund products more accessible to a wider investor base,” said Tung.

He believes the Vietnamese fund industry could gradually expand to account for 15-20 per cent of GDP, although reaching this level would require more than growth in AUM.

“It would depend on the simultaneous development of the institutional investor base, higher-quality listed companies, more diversified fund products, stronger fund management capabilities, wider digital distribution and greater investor confidence,” he said. “The development of the fund industry should therefore be viewed as part of the broader restructuring of Vietnam’s capital market rather than as a standalone financial services objective.”

Vietnam steps up market reforms as FTSE Russell reviews upgrade progress On February 5 at the Ministry of Finance (MoF), Deputy Minister Nguyen Duc Chi received a working delegation from FTSE Russell, led by CEO Fiona Bassett.

SSC steps up engagement with FTSE Russell on market reforms The State Securities Commission of Vietnam is strengthening its engagement with FTSE Russell to advance market reforms and deepen Vietnam’s integration into global capital markets.

Capital mobilisation essential for Vietnam's growth targets Vietnam needs a more balanced financial system that reduces reliance on bank lending while strengthening capital markets to finance long-term investment, government officials said at a conference in Hanoi.