Vietnam has undergone dramatic shifts in recent decades as the country evolves from a command economy to a market economy. Many investors have looked at emerging markets such as Vietnam as an area of potential investment. Vietnam's economy grew by 2.9% in 2020, one of just a few economies to expand amid the COVID-19 pandemic. The World Bank forecasts that the country's economy will grow by 4.8% in 2021. Due to the ongoing negative impact of the COVID-19 pandemic, the current forecast is two percentage-points lower than the projection the World Bank made in December of 2020. One way investors can gain exposure to Vietnam's economy is by investing in a Vietnam-focused exchange-traded fund (ETF), which can offer increased diversification, helping to protect against risk. Some of the largest companies in Vietnam include Hoa Phat Group JSC (HPG) and No Va Land Investment Group Corp. (NVL).

Key Takeaways

  • Vietnamese equities outperformed the broader U.S. market over the past year.
  • The best (and only) Vietnam ETF is VNM.
  • Its top three holdings are Masan Group Corp., Vietnam Dairy Products Corp., and Vingroup Joint Stock Co.

There is only one distinct ETF trading in the U.S. that is dedicated to the Vietnamese equity market. Vietnamese equities, as measured by the MSCI Vietnam Index, have outperformed the broader market with a total return of 46.4% over the past 12 months compared to the S&P 500's total return of 31.1%, as of Aug. 30, 2021. The best-performing (and only) Vietnam ETF is the VanEck Vectors Vietnam ETF (VNM). We take a closer look at this fund below. All numbers below are from ETFdb.com as of Aug. 31, 2021.

VanEck Vectors Vietnam ETF (VNM)

  • Performance over 1-Year: 34.9%
  • Expense Ratio: 0.66%
  • Annual Dividend Yield: 0.36%
  • 3-Month Average Daily Volume: 238,491
  • Assets Under Management: $544.6 million
  • Inception Date: Aug. 14, 2009
  • Issuer: VanEck

While some emerging market ETFs own Vietnamese equities, VNM is the closest thing to a pure play. The fund tracks the MVIS Vietnam Index, which reflects the performance of the largest and most liquid companies that operate in Vietnam. VNM is a multi-cap ETF that invests in equities of various market capitalizations. Like its index, it includes companies that are both domiciled in Vietnam and elsewhere, but which generate at least 50% of their revenue from Vietnam. More than two thirds of the fund's holdings are of companies domiciled in Vietnam. Companies based in Taiwan, South Korea, Japan, and Malaysia are also represented. Real estate has the largest sector weighting in the fund, followed by consumer staples and financials. VNM follows a blended strategy, investing in both growth and value stocks. Below, we'll take a look at the fund’s 10 largest holdings.

VanEck Vectors Vietnam ETF (VNM) Top 10 Holdings
Company Name (Ticker) Percent of VNM Assets Description of Company
Masan Group Corp. (MSN:STC) 8.4% Food and beverage processor
Vietnam Dairy Products Corp. (VNM:STC) 8.0% Dairy product manufacturer and distributor
Vingroup Joint Stock Company (VIC:STC) 7.3% Conglomerate with a focus on real estate development
Vinhomes JSC (VHM:STC) 7.2% Real estate developer
No Va Land Investment Group Corp. (NVL:STC) 6.0% Real estate investment firm
Hoa Phat Group JSC (HPG:STC) 5.3% Steel products manufacturer
Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB:STC) 4.9% Commercial bank
SSI Securities Corp. (SSI:STC) 4.2% Brokerage, trading, and financial advisory services
Feng Tay Enterprise Co. Ltd. (9910:TAI) 4.0% Manufacturer of athletic footwear
Mani Inc. (7730:TKS) 4.0% Manufacturer of medical goods and equipment

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