Vietnam's stock market is set to be reclassified from a frontier market to an emerging market, a change confirmed by FTSE Russell in April 2026. This redesignation is expected to commence on 21 September and will be implemented in four stages over the following 12 months.
The reclassification is anticipated to immediately add substantial amounts of passive fund flows into the country's stock market. Over subsequent years, this could be followed by billions of additional capital from active managers, according to Tung Dang, chief economist at Dragon Capital.
Vietnam's economy grew by 8% last year, making it the 13th-fastest growing globally, as reported by the World Bank. Government reforms are driving this growth, with policies focused on empowering the private sector, boosting R&D spending, and increasing foreign investment.
The Vietnamese market, as represented by the MSCI Vietnam Index, is heavily weighted towards the real estate and financials sectors, which account for 44.4% and 24.6% of the market respectively as of 30 June. This composition is considered typical for an emerging economy, with banks being a primary funding source and real estate developers playing a key role in urbanisation.