Key Takeaways:

• Vietnam is growing faster than EM peers yet still trades at a discount. Consensus expects roughly 20% EPS growth in 2026 at an attractive valuation.
• FTSE Russell reclassification to Secondary Emerging Market status begins September 2026. MSCI inclusion could follow, potentially unlocking $25 billion in equity inflows by 2030.
• Vietnam's manufacturing rise reflects years of real investment. Apple and Samsung have made it a primary production hub, not just a tariff workaround.

Index performance is not illustrative of fund performance. It is not possible to invest directly in an index. Past performance is no guarantee of future results. This material is for informational purposes only and is not investment advice or a recommendation. Views and forecasts are subject to change and may not be realized.

Vietnam’s High Growth Without a High Multiple

Vietnam's GDP grew 7.83% year on year in Q1 2026¹ exceeding expectations even as rising oil prices weighed on growth across EM Asia. Foreign direct investment, manufacturing export momentum, and domestic consumption have continued to support Vietnam’s economy through the energy shock, demonstrating the resilience of Vietnam's growth relative to its peers.

Market consensus expects approximately 20% EPS growth in Vietnam in 2026, driven by broad-based consumption gains supported by ongoing tax reforms.² Yet Vietnam still trades at a discount to EM Asia peers, placing it near the upper end of the region's growth rankings at one of its more attractive valuations. That combination of above-peer earnings growth and below-peer valuation is increasingly difficult to find in global markets today.

Vietnam Stocks look attractive vs. Asian Peers

Source: Bloomberg. Consensus estimate data based on MSCI Indices. Data as of 3/31/2026.

MarketVector^™ Vietnam Local Index (MVVNMLTR) returned approximately 64% in 2025, fueled by a rally in Vietnamese equities ahead of FTSE Russell's October 2025 confirmation of Vietnam's Secondary Emerging Market status. Despite that run, Vietnam continues to trade at a discount to EM peers even as earnings expectations have moved higher.

Structural Tailwinds of Vietnam

Three structural pillars support the case for Vietnam going forward, each of which we have covered in prior research.

1. Index Inclusion for Vietnam

FTSE Russell confirmed on April 7th, 2026 that Vietnam’s reclassification from Frontier to Secondary Emerging Market status, is on track, with inclusion in global equity indices commencing September 2026.³ Vietnam's government moved quickly on the global broker access requirement, allowing foreign investors to place orders via international brokerages without opening onshore accounts and expanding the stock universe eligible for non-prefunding trades.⁴

These reforms satisfied FTSE's interim review requirements and may also improve Vietnam's standing in MSCI's Global Market Accessibility assessment, particularly in "Clearing and Settlement" and "Investor Registration and Account Setup”, two criteria evaluated in MSCI's June 2026 EM Watchlist review. While it’s unclear if this will continue, countries that have historically been added to the MSCI EM Watchlist have seen a 15–60% rally in the following 24 months.² Reclassification is also likely to spur broader upgrades to market infrastructure including settlement, clearing, and global broker connectivity, enabling wider institutional access over time.

2. Vietnam Has Become a Production Destination

Vietnam has emerged as the preferred destination for companies diversifying production out of China, supported by competitive labor costs, geographic proximity to China, a young workforce, and an expanding network of free trade agreements. Electronics exports reached nearly $108 billion in 2025, placing Vietnam among the world's top 10 exporters in the sector.⁵

Apple now sources most of its U.S.-bound electronics from Vietnam, and Samsung produces roughly half of its smartphones there.⁶ This is not a tariff-driven adjustment, it reflects years of investment in manufacturing capacity, infrastructure, and workforce development.⁷

3. Vietnam’s Market and Policy Reforms

Vietnam's government is enacting structural reforms designed to deepen the private sector and improve the investment climate. Policymakers are targeting private sector contribution to GDP of 60–70% by 2030, up from approximately 50% today, through initiatives to remove regulatory barriers, protect private property rights, and ensure fair competition.⁸

On the fiscal side, public investment as a percentage of GDP has reached its highest level since 2012, with more than $160 billion allocated to nationwide transportation infrastructure, and new international financial centers in Ho Chi Minh City and Da Nang designed to attract global investment.⁹

New tax reforms in 2026 reduce the corporate tax burden on small and medium enterprises and lower personal income taxes for households, both measures intended to stimulate investment and consumption. Together, these policies reinforce the government's 10% economic growth target for 2026.⁹

Vietnam’s Public Investment as % of GDP

Source: CEIC Data, J.P. Morgan

Investing in Vietnam

VanEck Vietnam ETF (VNM) is the largest and most liquid U.S.-listed Vietnam ETF, providing investors with one-trade access to the Vietnamese equity market.¹⁰ VNM offers exposure to a market defined by strong earnings momentum, ongoing capital market reforms, and credible catalysts for continued re-rating, while remaining under-owned relative to its potential weight in global portfolios.

To receive more Emerging Markets Equity insights, sign up in our subscription center.