The discussion is no longer limited to how much capital will flow into the market, but increasingly focuses on a more strategic question: Which ETFs will play a decisive role in “conquering” the Vietnamese market during the 2026–2030 cycle?

Together with AAM Invest, we explore this question from a long-term, strategic investor perspective.
 

Vietnam’s confirmation by FTSE Russell that it meets all criteria for market upgrade—expected to take effect from September 2026—carries significance far beyond symbolic recognition. In practice, this represents a “switch-on signal” for global passive capital flows, particularly ETFs tracking emerging market indices.

According to estimates by various research institutions, ETF inflows could reach approximately USD 400–450 million in the initial phase alone, excluding secondary spillover effects from active funds, pension funds, and sovereign wealth funds following the upgrade.

Notably, ETF investments are typically rule-based, large-scale, and long-term, as allocations are driven by index weightings rather than short-term sentiment.
 

 

Among global asset managers, Vanguard stands out as one of the most influential names for Vietnam in the upcoming cycle.

The Vanguard FTSE Emerging Markets ETF, with net assets exceeding USD 100 billion, tracks the FTSE Emerging All Cap Index and is widely expected to be the largest single source of ETF inflows into Vietnam once the market is officially upgraded.

With an estimated weighting of around 0.34%, potential inflows from this ETF alone could reach USD 350 million, accounting for the majority of early-stage ETF capital entering the Vietnamese market.

More importantly, the signaling effect is substantial. Vanguard’s proactive engagement with Vietnamese regulators underscores its long-term confidence in the market’s transparency, accessibility, and readiness for global integration. As a global pioneer in index investing, Vanguard’s involvement carries strong credibility implications.
 

During the market-upgrade cycle, ETFs do not merely act as buyers of equities, but also serve as a mechanism for market standardization.

Global ETFs typically require:

International-standard account opening, custody, and settlement mechanisms

High levels of information transparency and effective index replication

Sufficient liquidity to deploy capital at scales of hundreds of millions of dollars

These requirements are accelerating Vietnam’s convergence with international best practices, spanning from trading infrastructure to the structure of investment products.

From a long-term perspective, ETFs function as a bridge that helps Vietnam transition from a retail-investor-driven market to an institutionally oriented market, aligning with the Ministry of Finance’s strategy to restructure the investor base.
 

Based on the experience of previously upgraded markets and global asset-allocation trends, four ETF categories are most likely to play a dominant role in Vietnam over the next cycle:
 

This will be the first and largest wave, including ETFs tracking FTSE Emerging Markets and MSCI Emerging Markets indices. These ETFs provide a foundational role by enhancing market liquidity and stability.
 

ETFs focused on banking, infrastructure, energy, and logistics are expected to benefit directly from Vietnam’s domestic growth momentum and long-term public investment strategies.
 

ETFs aligned with ESG (Environmental, Social, and Governance) principles, clean energy, digital transformation, and data infrastructure are increasingly favored by pension funds and sovereign investors, fitting well with Vietnam’s sustainable growth narrative.
 

Alongside foreign ETFs, domestic ETFs—if designed with strong transparency, low costs, and accurate index tracking—will play a crucial role in retaining long-term capital rather than merely acting as short-term conduits.
 

 

From an asset management standpoint, ETFs are not competitors to active funds, but an indispensable building block within long-term portfolios.

In the post-upgrade phase, Vietnam’s market is expected to experience:

ETFs—with their rule-based, transparent structure—will serve as the strategic allocation foundation, while active management products focus on alpha generation on top of that base.
 

 

Market upgrade is not the destination, but the starting point of a profound restructuring cycle. Within that cycle, ETFs will act as the vanguard force shaping Vietnam’s market, both in terms of capital inflows and operating standards.

For long-term investors, the question is no longer whether ETF capital will arrive, but rather: How can ETF inflows be embraced and structured to transform opportunity into sustainable value?

Market analysis and insights are prepared by AAM JSC, with the objective of providing strategic perspectives for investors amid the ongoing restructuring of Vietnam’s capital market.