Vietnam enters FTSE emerging-market indexes, starting at 10% of its weight
FTSE Russell added Vietnam to its Secondary Emerging indexes at the Monday, September 21, 2026 open, the first of four tranches it has said could redirect up to $6 billion.
FTSE Russell has put Vietnam’s emerging-market upgrade at as much as $6 billion. Monday’s open in Ho Chi Minh City applied the first 10% of Vietnam’s eventual weight. That 10% is about $52 million of Vietnamese stocks inside Vanguard’s broad FTSE emerging-markets fund VWO, and about $4 million inside Schwab’s smaller FTSE tracker SCHE. Most of the $6 billion is still a 2027 story.
By midday Monday in Ho Chi Minh City, the VN-Index was at 1,811, down 0.28% from Friday’s close, after Reuters reported it opened 0.54% higher, led by banks. Funds that track FTSE’s emerging-market indexes have to own Vietnam as of this morning. Funds that track MSCI’s do not. US-listed Vietnam and emerging-market funds last closed Friday, September 18, before the Ho Chi Minh open.
A 10% start on FTSE’s $6 billion estimate
FTSE confirmed the reclassification on Tuesday, April 7, after a March interim review, and implemented it from the open on Monday, September 21, eight years after Vietnam landed on the watchlist. Vietnam leaves the FTSE Frontier Index Series in a single step. Entry into the Global Equity Index Series, the emerging-market family, is staged: 10% of investability weight now, the free-float and foreign-ownership-adjusted stake a foreign index fund is assumed able to buy, then 20% at the open on Monday, March 22, 2027, 35% on Monday, June 21, 2027, and 35% on Monday, September 20, 2027.
The $6 billion figure is FTSE’s envelope for the full inclusion, passive and active money together, not a Monday print. It separately put the passive piece at about $1.5 billion, which at a 10% factor is about $150 million across index trackers in this first step, with 20% more in March and 35% in each of the last two 2027 steps. Maybank Securities has used a higher, $8 billion, total that mixes active and passive money, and the World Bank has used a different window, $3 billion to $5 billion of portfolio flows in the first few years if the upgrade sticks.
FTSE also said it will look at whether index trackers can actually replicate each benchmark change before it proceeds to the next tranche. The later 35% steps are on the calendar. They are not a wire transfer.
Vingroup, Vinhomes, and a foreign-ownership haircut
FTSE’s August review listed 27 Vietnamese stocks for the FTSE Global All Cap Index. Six of them, the large- and mid-cap names, also go into FTSE All-World: Vietcombank, Vingroup, Vinhomes, BIDV, Hoa Phat, and VPBank. The rest enter as small caps, including FPT.
Inside FTSE’s own Vietnam index, two listed companies of one family conglomerate dominate the book that a country-index bid is routed through. As of July 31, Vingroup was 16.65% and Vinhomes 15.68%, together 32.33%, or roughly a third of that index. Hoa Phat was 8.74%, FPT 5.45%, and Vietcombank 4.92%. Those are local Vietnam-index weights, not the weights those names will carry inside FTSE Emerging. FTSE caps single stocks at 15% on a quarterly cycle in the Vietnam index, so both stocks were already above that cap between resets.
FTSE haircuts constituents for foreign-ownership limits and for how much room is actually left. MSCI’s June review, which still classifies Vietnam as a frontier market, said those limits run from 0% to 75% in some conditional and sensitive sectors, affect more than 10% of Vietnamese equity-market capitalization, and leave more than 1% of the MSCI Vietnam Investable Market Index cramped for foreign buyers. The upgrade does not repeal those limits.
SSI Research estimated on Friday, September 18, that FTSE-linked passive funds would buy about $240 million of Vietnamese shares in the first tranche, with the largest inflows aimed at VPBank, Vinhomes, FPT, and Hoa Phat. It said Vingroup could see net outflows of $28 million as selling by existing ETFs outweighs upgrade-related buying. Those are forecasts of a rebalance, not reported fills.
The funds that must buy, and the ones that need not
VWO holds $168.5 billion against the FTSE Emerging Markets All Cap China A Inclusion Index and is graded A. SCHE holds $12.9 billion and is also graded A. Both had to own Vietnam at Monday’s open.
The MSCI side of the same shelf does not move. The large MSCI emerging-markets fund IEMG holds $161.8 billion and is graded A; the older MSCI fund EEM holds $31.3 billion and is graded B. Neither benchmark changed this morning.
The dedicated Vietnam vehicle is a different product. VanEck’s fund that holds Vietnamese companies VNM already owns this market. Other people’s forced buying is a new bid under those holdings, not a new portfolio. The fund is $514 million, charges 0.66%, and is graded D among EM single-country funds. As of the September 20 holdings file, Vingroup and Vinhomes lead the book, with financials and real estate more than half the fund.
Vingroup and Vinhomes are the two largest holdings
- 10%
- 8.1%
- 5.9%
- 5.7%
- 5.3%
- 5.0%
- 4.5%
- 4.4%
Global X’s smaller MSCI Vietnam fund VNAM is $36 million and graded C; it tracks an MSCI Vietnam index that is still built as a frontier-market sleeve.
That bid has not done much for the dedicated fund yet. VNM has returned 1.8% since the April 7 close, the last US session before FTSE confirmed the upgrade, and is down 7.6% year to date through Friday. It closed Friday at $17.63, 11% below its 52-week high.
MSCI has not followed
FTSE’s August FAQ tied the upgrade to a global-broker access model, under which foreign institutions can face global brokers as counterparties, and to an enhanced non-prefunding framework so those investors need not post cash before they trade. The remaining work it named was finishing bilateral broker agreements. It did not, in that document, hang the decision on a new Korean-built trading system or on a central counterparty.
Those pieces are still on the market’s to-do list. Reuters reported in April that Vietnam had scrapped equity pre-funding, was moving toward centralized clearing by 2027, and had opened a path for foreigners to deal through global brokerages. Thomas Nguyen, chief global markets officer at SSI Securities, said in August that a planned central counterparty is “the next important step” and that, with the new trading system, it could eventually support intraday trading, securities lending, and short selling. None of that changed at Monday’s open.
MSCI’s June 2026 Global Market Accessibility Review, using conditions as of May 31, again left Vietnam off the upgrade watch list. It credited a short-term non-prefunding fix and noted a full long-term version is expected with a central counterparty targeted for 2027. It still flagged the foreign-ownership limits, the lack of an offshore currency market, mandatory investor registration, and incomplete English-language disclosure. Vietnam News, reporting that June decision, said foreign-ownership limits remained the largest obstacle.
FTSE and MSCI are different gates. Today only one of them opened, and only 10% of the way.
The next dates on FTSE’s clock are March, June, and September 2027, each subject to a check that the last change could be replicated. MSCI’s next annual classification review is due in June.
Frequently asked
How much money actually moved into Vietnamese stocks on day one?
FTSE's passive estimate implies roughly $150 million across index trackers in the first step, while SSI Research forecast about $240 million of buying by FTSE-linked passive funds.
Which funds had to buy Vietnam?
Funds tracking FTSE emerging-market indexes, such as Vanguard's broad FTSE emerging-markets fund and Schwab's smaller FTSE tracker, had to own Vietnam at the open; MSCI-tracking funds did not.
When do the rest of the tranches happen?
20% in March 2027, then 35% in June and 35% in September 2027, each subject to FTSE checking that trackers could replicate the previous change.
Why hasn't MSCI upgraded Vietnam too?
MSCI's June review kept Vietnam off the upgrade watch list, flagging foreign-ownership limits, no offshore currency market, mandatory investor registration, and incomplete English-language disclosure.