Dragon Capital: Vietnam is a compelling long-term investment opportunity

Dragon Capital: Vietnam is a compelling long-term investment opportunity

30 juli 2025

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Strong prospects for the announcement of an upgrade to Emerging Market status indicate Vietnam is a compelling investment opportunity. An upgrade could bring in significant capital inflows and raise Vietnam’s profile with global investors.

New analysis from Dragon Capital, Vietnam’s largest fund manager, highlights accelerating economic momentum and rising investor confidence as the Vietnam Index reached a new all-time high of 1,531 on 25 July (please see the attached press release). Year-to-date, the Index has gained 22% in local currency terms and 19% in USD terms. Analysis from Dragon Capital shows average daily trading volume now regularly exceeds $1.5bn, with July’s month-to-date volume up 87% compared to the same period in 2024.

The rally, which coincides with the Ho Chi Minh Stock Exchange’s 25th anniversary, is underpinned by the country’s robust macroeconomic fundamentals with GDP growth, significant increases in registered foreign direct investment (FDI), as well as experiencing a rise in exports and imports during the first half of 2025.

A recent trade deal with the US, which is Vietnam’s largest export market, saw tariffs fall from 46% to 20%, meaning Vietnam still maintains its competitive advantage with peer exporters. Trade is up, reaching $432 billion in the first half of the year, up 16.1% YoY. Exports rose 14.4% and imports 17.9%, resulting in a trade surplus of around $7.63 billion.

Further, strong prospects for the announcement of an upgrade to Emerging Market status indicate Vietnam is a compelling investment opportunity.

Vietnam’s economy continues to outperform regional peers in Southeast Asia on all fronts, with GDP growth rising to 7.52% YoY in the first half of 2025 – the strongest performance in over a decade. This is being driven by strong exports and a rebound in services.

Registered FDI surged to $21.5 billion – up 32.6% YoY – to reach the highest first half level since 2009. Actual disbursements rose 8.1% to $11.7 billion, led by manufacturing and real estate. And Vietnam continues to accelerate through its legal and regulatory reforms, including government streamlining, promoting the private sector, and technology enhancement, which is unlocking stalled projects to improve capital deployment and support sustained growth, while reinforcing confidence in Vietnam’s governance.

Available for interview: Mai Vu, Portfolio Manager at Dragon Capital’s Vietnam Equity (UCITS) Fund (VEF) is available for interview.

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