ETF capital continues to flow out of Việt Nam despite improved investment outlook

ETF capital continues to flow out of Việt Nam despite improved investment outlook

According to data from FiinTrade and SSI Research, ETFs posted a net outflow of over VNĐ210 billion between May 12 and 16, marking the second consecutive week of withdrawals.

Exchange-traded fund (ETF) capital continued to flow out of the Vietnamese stock market in the first half of May. — Photo baodautu.vn

Exchange-traded fund (ETF) capital continued to flow out of the Vietnamese stock market in the first half of May, signalling lingering caution among foreign investors despite optimism surrounding ongoing trade negotiations and Việt Nam’s potential market upgrade.

According to data from FiinTrade and SSI Research, ETFs posted a net outflow of over VNĐ210 billion between May 12 and 16, marking the second consecutive week of withdrawals.

This brought the year-to-date outflow to more than VNĐ6.8 trillion (US$261.9 million). As of May 16, total net assets held by ETFs in Việt Nam stood at approximately VNĐ52.4 trillion, a 7.8 per cent drop compared to the end of 2024.

The withdrawals were particularly concentrated in domestic ETFs, especially the VFM VNDiamond ETF — the largest among local ETFs — which saw net outflows of nearly VNĐ74 billion last week and over VNĐ600 billion in April alone.

Other funds, such as VFM VN30 ETF, DCVFMVN30 and KIM Growth VNFINSELECT also witnessed significant redemptions. Only a few, including MAFM VN30 and KIM Growth VN30, recorded slight inflows.

Foreign ETFs likewise showed no signs of a significant rebound. Fubon FTSE Vietnam ETF, VanEck Vietnam ETF and Xtrackers FTSE Vietnam Swap UCITS ETF continued to experience net redemptions throughout April and early May.

Although Fubon saw a minor inflow of VNĐ7 billion on May 19, it was not enough to reverse the persistent trend of outflows that has continued since the beginning of the year.

In April alone, ETF net outflows totalled VNĐ2.54 trillion. Since peaking in July 2023 at around VNĐ83.1 trillion in assets under management, total assets held by ETFs in Việt Nam have fallen below VNĐ50 trillion — the lowest in nearly two years.

Analysts say the continued ETF outflows reflect short-term instability in the investment environment, particularly concerns over US tariff policies, exchange rate volatility and valuation in major global markets. Nevertheless, direct foreign investor trading via matching orders on the domestic exchange provided some relief, with net buying reaching VNĐ2.88 trillion in the week of May 12–16 — the highest level in two years.

Speaking to vneconomy.vn, Head of Retail Research at Yuanta Securities, Nguyễn Thế Minh, noted that the easing of Việt Nam’s five-year credit default swap rate and a global shift away from US markets could create conditions for capital to return to Việt Nam in the next few months.

He also pointed to renewed optimism over trade talks between Việt Nam and the United States, as well as the country’s ongoing efforts to secure an upgrade to emerging market status. 

Bizhub