Vietnam’s Stock Market Surges as Foreign Capital Returns

International investors are flooding back into Vietnamese equities, powering one of the market's strongest trading sessions and drawing significant attention to funds like the VanEck Vietnam ETF. The benchmark VN-Index recorded a substantial gain of 42.82 points, or 2.44%, closing at 1,796.85.

A primary catalyst for the bullish sentiment is a forthcoming reclassification by FTSE Russell. Scheduled for September 2026, Vietnam is set to be elevated from frontier market status to a secondary emerging market. Analysts view the current buying activity as early positioning ahead of this structural shift, which is critical because it will open the country to a new wave of passive investment from emerging market ETFs previously barred from investing there. Regulatory improvements, including the ability for global brokers to trade without a local account, have paved the way for this transition.

Foreign Investors Lead the Charge

Marking a sharp reversal from a prolonged period of outflows, international capital has returned with force. For a second consecutive day, foreign investors were net buyers, injecting over 2,100 billion VND (approximately 85 million USD) into the market. This activity signals a significant shift in sentiment compared to recent months.

The buying was notably concentrated in the banking sector:
* Military Bank (MBB): Net purchases of roughly 1,408 billion VND
* VPBank (VPB): Net purchases of approximately 162 billion VND
* Mobile World Investment (MWG): Net purchases of about 120 billion VND

Should investors sell immediately? Or is it worth buying VanEck Vietnam ETF?

Interestingly, this influx coincided with net selling in previous favorites such as Vingroup (VIC) and Hoa Phat Group (HPG), suggesting global funds are executing a strategic portfolio rotation.

ETF in Focus Amid Large-Cap Rally

The VanEck Vietnam ETF, with assets under management between $618 million and $637 million, remains the primary conduit for global investors seeking exposure to Southeast Asia's growth. Its composition makes it highly sensitive to the performance of market leaders like Vingroup and Vinhomes. So far, the market rally has been narrowly focused on large-cap stocks within banking, finance, and real estate, raising questions about whether the momentum will broaden to smaller companies.

The sustainability of the current uptrend now hinges on the consistency of foreign capital inflows. Market participants will be closely watching in the coming weeks to see if the rally gains wider participation ahead of the official index transition in September 2026.