After waiting for eight years, it has finally come true! FTSE Russell will include Vietnam in the emerging markets, with $60 billion in incremental funds ready to be unleashed.

The Vietnamese securities regulatory authority expects that the long-term recognition of the country's emerging market status by FTSE Russell will help attract foreign capital back to the market, which has been experiencing continuous selling pressure this year. The State Securities Commission stated in a statement on Wednesday, "This will help attract large-scale international investment flows, enhance liquidity, and strengthen Vietnam's position in the global financial system." FTSE Russell announced on Tuesday that it will upgrade Vietnam from a frontier market to an emerging market in September, and will start phasing it into its global stock index. The index provider estimates that this transition could lead to up to $6 billion in funds flowing into Vietnam. Since 2018, Vietnam has been on the observation list for this category, which also includes China and India. Analysts from Maybank Kim Eng Securities wrote in a research report, "It is expected that foreign capital will gradually accumulate before and after the index inclusion, with passive inflows and significantly larger active allocation funds totaling up to $8 billion." "The phased implementation should achieve orderly absorption, while supporting steady improvement in market liquidity and depth." According to official data, foreign investors have been selling Vietnamese stocks this year, with a net outflow of about $1.2 billion from the Ho Chi Minh Stock Exchange so far, compared to a net outflow of $5 billion in 2025. FTSE Russell stated that the addition of $6 billion in foreign capital will give Vietnam a weight of 0.35% in its emerging market index, with potential inclusions being conglomerates such as Vingroup, Masan Group, FPT Corporation, and Hoa Phat. The indexing company expects around $1.5 billion of passive fund inflows, with 10% joining in September this year, another 20% in March next year, and 35% each in June and September next year. Hoang Huy, Stock Strategist at Maybank Kim Eng Securities Vietnam, said that Vietnam has remained on the observation list for eight years, but only started seriously addressing the reforms needed for an upgrade in 2022. The turbulence in the bond and real estate sectors at that time exposed the limitations of credit-led growth. Subsequent measures included the abolition of stock pre-financing, a move towards central clearing by 2027, and allowing foreign investors to enter the market directly through global brokers. The next step for the Vietnamese government is to aim for an upgrade to MSCI's emerging market status by 2030. Nguyen The Minh, R&D Head at Yuanta Securities Vietnam, stated, "Attaining an MSCI upgrade will help Vietnam attract much larger capital inflows, although the main obstacle currently still remains in the form of foreign ownership limits." "But with the upgrade from FTSE Russell and the current reforms by the Ministry of Finance, the upgrade to MSCI may come earlier than 2030, possibly as early as 2028."