Vietnam officially gains emerging market status in FTSE Russell index

Vietnam’s stock market was formally elevated from frontier to emerging-market status on Monday (September 21, 2026), when the country’s shares entered FTSE Russell’s emerging-market index.

The milestone followed years of market reforms intended to attract foreign investors.

FTSE Russell estimated that the inclusion of Vietnamese equities could bring as much as US$6 billion into the country.

Vietnam had been on the watchlist for promotion since 2018, seeking entry into a market category that also includes China and India.

The VN-Index, Vietnam’s benchmark share index, gained 0.54% at Monday’s open as banking stocks led the advance, before paring part of the increase.

Interest may ease before year-end

Expectations surrounding the reclassification have renewed foreign investors’ interest in Vietnamese shares.

Ho Chi Minh Stock Exchange data showed that foreign investors were net buyers of 2.7 trillion dong, or nearly THB3.5 billion, last week, although their net sales for the year still stood at about 91 trillion dong.

However, Thomas Nguyen, chief global markets officer at SSI Securities Corporation, Vietnam’s second-largest securities firm, said market interest was likely to decline after the initial response subsided.

“I expect the market to remain relatively subdued until we get closer to 2027,” Nguyen said.

The inclusion of Vietnamese shares will be carried out in four stages through 2027, with their weighting increased by 10% in September 2026, followed by a further 20% in March 2027 and 35% in each of June and September 2027.

“As we move closer to the next index inclusion round in March, interest should return. With a larger weighting allocated in that round, domestic investors are also likely to see a more noticeable impact,” Nguyen said.

Vanguard plans additional US$2.5 billion investment

On Friday (September 18, 2026), asset manager Vanguard announced plans to invest about US$2.5 billion in Vietnam through FTSE index-linked funds over the coming year.

“Vanguard plans to retain its investments in Vietnam for decades, as long as the country remains in the FTSE benchmark,” Duncan Burns, Vanguard Australia’s Asia-Pacific head of investment management and global equity, said at a conference in Hanoi.

Burns said allowing foreign investors to purchase shares without providing funds in advance had made access easier for overseas investors such as Vanguard, which manages about US$13 trillion in assets worldwide.

The introduction of KRX, a new trading platform developed with South Korea’s stock exchange, has helped modernise Vietnam’s stock-market infrastructure.

Progress towards a centralised settlement system and other reforms is also strengthening the market.

However, concerns remain over foreign ownership limits and restrictions on the free float of shares in some companies.

Attention turns to a possible MSCI upgrade

Vietnam’s entry into FTSE Russell’s emerging-market index has also raised expectations that MSCI could promote the country to emerging-market status in the future.

Investors said the introduction of a central counterparty (CCP) clearing system, expected in 2027, could move Vietnam closer to meeting MSCI’s market-access requirements.

“FTSE is about access to the market, while MSCI is about scale,” Nguyen said.

“That is why the central counterparty clearing system is so important.”