Vietnam’s stock market is set to receive a significant boost with the impending investment of another hundred billion from a foreign fund.
The upcoming CGS Fullgoal Vietnam 30 Sector Cap ETF listing on the Singapore Stock Exchange (SGX) on August 25 is expected to raise a minimum of USD 5 million (~ VND 110 billion). The fund aims to invest in Vietnamese stocks and closely replicate the performance of the iEdge Vietnam 30 Sector Cap Index.
The iEdge Vietnam 30 Sector Cap Index is specifically designed to track the 30 largest and most liquid companies listed on the Ho Chi Minh Stock Exchange (HoSE). The index takes into account the free-floating market capitalization, foreign ownership limits, and imposes a maximum share weight limit of 10% and a maximum industry limit of 25%.
The top 10 largest stocks in the index basket, as of June 14, are dominated by financial groups, featuring three securities companies: SSI, VNDirect (VND), Vietcap (VCI), and two banks: BIDV (BID), SHB. The remaining stocks include familiar names in the VN30 basket, such as Vinhomes (VHM), Hoa Phat (HPG), Vinamilk (VNM), Vingroup (VIC), and Masan (MSN).
The CGS Fullgoal Vietnam 30 Sector Cap ETF is not the first foreign ETF to enter Vietnam’s stock market. Several well-known ETFs, including Fubon FTSE Vietnam ETF, VanEck Vietnam ETF, FTSE Vietnam ETF, and KIM Growth VNFinSelect ETF, have already established their presence. Additionally, there are numerous notable domestic ETFs such as DCVFM VNDiamond ETF, DCVFM VN30 ETF, DCVFM VNMidcap ETF, SSIAM VNFinLead ETF, FPT CAPITAL VNX50 ETF, and MAFM VNDiamond ETF.
Although ETFs have been instrumental in attracting foreign capital into Vietnam in recent years, the global capital withdrawal wave has somewhat slowed down the inflow of funds in the past few months. Some ETFs have faced challenges in attracting investments and even experienced capital withdrawals.
Despite these short-term fluctuations, experts predict that ETFs will become an explosive trend in the future. Vietnam’s stable macro outlook and the high growth potential of listed companies are expected to attract a strong return of foreign investors, particularly after the market’s anticipated upgrade.