FTSE Russell: Vietnam could upgrade to a Secondary Emerging Market by September 2026, with phased rollout over four quarters to ensure liquidity

On 13 April, SSI Securities Corporation organized a webinar titled "FTSE Inclusion - Structural Changes and Investment Opportunities", which attracted the attention of a wide base of investors. During the discussion, Wanming Du, APAC Policy Director at FTSE Russell, said that Vietnam has fully met the criteria to upgrade to a Secondary Emerging Market. The FTSE Russell representative expressed confidence that Vietnam is on the right track and could reach the target of becoming a secondary emerging market around September 2026. The transition will not occur immediately; it will be implemented in four phases, corresponding to each quarter over a one-year period from the upgrade date. The staged approach is necessary given the growth in assets under management (AUM), to ensure operational readiness, liquidity, and meeting investor requirements. 'What matters is that capital flows into the market and stays longer, not just moving in and out frequently. Transparency and standardization in appraisal will also help attract large pools of capital, enabling companies to scale and develop more transparently and professionally,' the FTSE representative said. Comparing frontier markets with emerging markets, FTSE Russell experts pointed to a large difference in the scale of capital inflows. While frontier markets have smaller AUM and passive inflows, in emerging markets the indices are of large scale. 'Even if Vietnam accounts for about 1.4% of a hundreds-of-billions USD passive fund, the absolute value could reach billions or hundreds of billions, depending on the fund size. This implies that the upgrade will move Vietnam from attracting small-capital inflows to access substantially larger pools of capital,' the FTSE expert noted. David Rabinowitz, UBS's Global Index Analytics and Asia-Pacific Market Structure Director, commended Vietnam's reform efforts to improve the regulatory framework and policies to facilitate investor participation. In particular, moving to a non pre-funding trading model and improving liquidity are seen as important steps. Regarding Vietnam's position on the international investment map, Rabinowitz said the market is showing impressive growth, especially among individual investors. About 12% of Vietnam's population has engaged in the stock market—a higher rate than some regional peers such as Indonesia. The market size has grown significantly over the past decade, from about $52 billion to well over that today. He noted that this foundation provides favorable conditions for portfolio diversification, including a positive free float. Comparing with international experience, the expert said Vietnam is following a path similar to China about 10–15 years ago, a period of strong inflows from international investors. However, achieving that requires ensuring fundamental factors such as market access, ease of investment operations, and market-structure modernization.