Insights from VFA 2026 #1: Proactively Capturing Foreign Capital Flows After the Market Upgrade

Vietnam's upgrade to Secondary Emerging Market status by FTSE Russell is opening up greater access to international capital flows. FTSE Russell estimates that the Vietnamese market could attract approximately USD 6 billion from active and passive funds. However, opportunities from the market upgrade will not automatically translate into actual capital inflows.

Speaking at a panel discussion at VFA 2026, Mrs. Nguyen Thi Hai Binh, Head of Account Management, Securities Services, HSBC Vietnam, noted that domestic fund management companies' opportunity to access international capital lies in highly selective active flows from foreign funds seeking to invest in domestic funds (fund-of-funds model). These flows depend on multiple factors, including product quality, liquidity, foreign exchange risk, and macroeconomic stability. In addition, the master-feeder fund model can enable Vietnamese fund management companies to proactively reach international investors. This model has already been successfully adopted by some domestic fund management companies.

To capture this opportunity, according to Mrs. Hai Binh, domestic fund management companies need to strengthen their competitiveness against the criteria international investors prioritize: long-term track record, scale, liquidity, risk management, governance quality, and the ability to provide transparent, consistent disclosure.

This also shows that the competition to attract foreign capital lies not only in investment products, but also in the capabilities behind them – from data quality, analytics and valuation to risk management and operational professionalism.

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