Fund industry must strengthen institutional investor base: SSC

Fund industry must strengthen institutional investor base: SSC

Vietnam’s securities fund industry needs to strengthen its institutional investor base, improve professional standards, and develop longer-term investment products as the country’s stock market enters a new phase of international integration, according to Vu Thi Chan Phuong, chairwoman of the State Securities Commission (SSC).

Vu Thi Chan Phuong, chairwoman of SSC. Photo: Chi Cuong

Speaking at the Vietnam Fund Awards 2026 seminar in Hanoi on September 22 co-organised by the Vietnam Securities Depository and Clearing Corporation, VIR, and FiinGroup, Phuong said the previous day's FTSE Russell market upgrade for Vietnam creates new opportunities for the market and the fund industry, while also raising expectations for professional investment institutions.

“As Vietnam’s stock market strengthens its position and international connectivity, professional investment institutions must also raise their standards accordingly,” Phuong said.

She added that developing the fund industry should be viewed as part of a broader effort to restructure the investor base, improve market quality, enhance fund management services and strengthen the mobilisation and allocation of medium- and long-term capital for the economy.

After nearly three decades of development, Vietnam’s securities market has become an increasingly important channel for medium- and long-term capital mobilisation, resource allocation and support for business growth, Phuong said.

"As Vietnam pursues high growth while accelerating infrastructure development, science and technology, innovation, digital transformation and the green economy, the financial market must focus not only on mobilising more capital, but also on allocating it more effectively and sustainably. This is where the fund industry has substantial room and potential for development,” she said.

Phuong said the Ministry of Finance and SSC view fund industry development as an integral part of financial market reform, capital market development and investor base restructuring. The objective is to build a more balanced and professional investor base capable of providing longer-term capital to the economy.

"Developing the industry is about forming a professional institutional investor base, bringing together capital from society and transforming fragmented sources of capital into organised, professionally managed funds that can be allocated to sectors capable of generating long-term value for the economy,” she said.

The direction is reflected in the government’s comprehensive financial market reform and the Ministry of Finance’s tasks for restructuring the investor base and developing the securities industry towards greater balance, professionalism, and sustainability.

Photo: Duc Thanh

Fund industry enters new phase

As of the end of June, Vietnam had 43 fund management companies and 141 securities investment funds. Total assets under management, including entrusted investment portfolios, reached approximately VND846 trillion ($32.5 billion), according to SSC data cited by Phuong.

Over the past decade, the industry has maintained strong growth, with assets under management increasing by more than 20 per cent annually on average.

Phuong said these results provide a foundation for further development, but the industry must now focus on improving the quality of assets under management, governance, professionalism and its contribution to the broader financial market, and economy.

SSC will prioritise six areas: completing the legal framework, restructuring the investor base, diversifying fund products, improving the competitiveness of fund management companies, strengthening investor education, and international integration.

The regulator will review regulations governing fund management companies, investment funds, distribution agents and service providers to create room for more diverse products that meet household savings and long-term investment needs.

Innovation, however, must be accompanied by risk management, transparency, safety and investor protection, Phuong said.

“Fund management is an industry that depends on trust and reputation. We need to improve the quality of the industry and strengthen the credibility of fund managers so that investors can feel confident placing their money with them,” she added.

The SSC will also work with relevant agencies and market participants to increase the proportion of institutional and professional investors, with the goal of building a more balanced investor base capable of supplying longer-term capital.

International capital

Phuong said the industry should develop products that connect long-term savings with priority sectors such as infrastructure, innovation, digital transformation, and green growth.

She highlighted the expanded legal framework, which includes provisions for infrastructure bond investment funds, money market funds, and index funds, as a foundation for developing the fund product ecosystem.

Fund management companies must also strengthen governance, risk management, investment analysis, and portfolio management, while developing professional human resources and applying technology in line with international practices.

The SSC will strengthen risk-based supervision, with particular attention to asset valuation, liquidity, conflicts of interest, and the management of investors’ assets.

Phuong said Vietnam should seek to attract not only index-tracking capital, but also active, long-term investment from global funds, asset managers and major financial institutions.

“The fund industry should be viewed as a professional institutional investment force with an important role in mobilising capital, transforming it into long-term investment flows and allocating it effectively to the economy,” she said.

She called for closer coordination among regulators, stock exchanges, the Vietnam Securities Depository and Clearing Corporation, fund management companies, securities firms, custodian banks, distributors, and investors.

The SSC will continue to focus on institutional reform, effective supervision, product innovation, investor base development and international integration to support a safer, more transparent, professional, and competitive fund industry, Phuong said.

VIR