VN-Index Stagnates Around 1,200 for 18 Years But Have Foreign Investors Really Lost Out?

In the context of a volatile global economy, Vietnam’s financial and investment expert community gathered at the Vietnam Forecast Dinner 2025 – an annual event hosted by the Vietnam Community of Investment Professionals – CFA Society in formation – to explore answers to Vietnam’s long-term growth challenges. 

As one of the keynote speakers, Mr. Nguyen Quang Thuan – Chairman of FiinGroup and FiinRatings – joined the CFA community in sharing insights on: 

• The potential impact of the newly announced retaliatory tariffs by the Trump administration and their broader implications for Vietnam’s economy and specific sectors. 
• 2025 earnings outlook remains optimistic, with the average forecast from analysts at +18%, while companies’ own growth targets are set at +10%. (See Charts 1.1 and 1.2) 

According to FiinGroup data, the top three sectors with the highest after-tax earnings growth potential are Retail (29%), Basic Resources (28%), and Healthcare (26%). In contrast, the bottom three include Travel & Leisure (-64%), Industrial Goods & Services (-20%), and Chemicals (-16%). (See Chart 2) 

Mr. Thuan also highlighted the increasing divergence in financial health across sectors. Industries such as Residential Real Estate, Construction, Energy, and Steel face significant refinancing risks, whereas sectors like Warehousing & Port Logistics and Industrial Real Estate maintain stronger capital structures and greater debt-raising capacity. 

On the stock market front, Mr. Thuan addressed a common concern among foreign institutional investors (FII): “Why has the VN-Index hovered between 1,200 and 1,300 points for nearly 20 years, while the S&P 500 has grown nearly fourfold?” 

Here are the key takeaways from his analysis based on FiinGroup data: 

• In 2007, the VN-Index peaked at 1,170 points with a P/E ratio of 26x, driven by a surge in foreign capital inflows (~USD 5.3 billion) amid post-WTO FOMO. However, the index later corrected to just 234 points. 
• FiinGroup’s calculations show that stocks favored by foreign investors (those with foreign ownership above 15% and market cap above USD 50 million) have seen strong gains. If tracked separately, this group of stocks would form an index approximating 2,255 points (See Chart 3). Names such as FPT, VNM, MWG, PNJ, REE, and VHM have appreciated nearly 4x over the past 10 years and almost 5x over 18 years. 

This suggests that while the VN-Index as an all-share, market-cap-weighted index may appear stagnant—due to the inclusion of many illiquid or underperforming small caps—the actual performance of high-quality, foreign-favored stocks has been strong. In fact, their long-term returns are comparable to, or even exceed, those of the S&P 500 or Dow Jones Industrial Average over the same 18-year period. 

Although foreign investors have continued to be net sellers in recent years, it’s worth noting that valuations for their preferred stocks have become increasingly attractive, with P/E ratios falling to around 12x—well below historical averages. Mr. Thuan emphasized that once significant changes occur in Vietnam’s capital market - such as an upgrade to Emerging Market status or an acceleration of SOE divestments and IPOs - a new wave of foreign investment could soon return. 

CFA Vietnam and FiinGroup share a common vision: to promote market transparency and build a healthy, sustainable financial system. Through thought leadership events like this, FiinGroup is proud to support the CFA community and the next generation of analysts in fostering Vietnam’s long-term economic growth and enhancing professional capabilities. 

With the mission “Enlighten the Market, Lead the Way to Success” FiinGroup is committed to supporting CFA Vietnam, investors, and young professionals through transparent, comprehensive data solutions, deep-dive analytics, and impactful knowledge-sharing initiatives. 

#FiinGroup #VietnamForecastDinner2025 #CFA #VietnamEconomy #DataDrivenFinance #NguyenQuangThuan #FinancialLeadership #YoungAnalysts #VietnamInvestment #CFACommunity #FiinForTheFuture