Institutional investors increasingly focusing on Vietnam

Written by Adam Cadle

30/08/2022

Institutional investors are increasingly focusing on Vietnam, specifically its technology and financial services sectors, according to latest research.

The research, conducted by PureProfile, interviewed 100 institutional investors and wealth managers across the UK, France, Germany Switzerland, Sweden, Finland, Norway, and Denmark in February 2022. When asked which Asian market offers the most attractive long-term returns for investors, 34% selected China, but this was followed by 26% who said Vietnam.

The Vietnam Index was one of the world’s best performing last year, delivering growth of 39%, and nearly half (47%) of the professional investors interviewed for Dragon Capital, the largest independent asset management company in Vietnam, said they invested in the country for the first-time in 2021. Some 23% said their allocation, and 29% say they are considering making an initial investment soon.

When selecting the four most attractive features of Vietnam for investors, 59% citied the country’s strong demographics – the country has a population of 97.6 million people of whom 55 million are of working age with a 97% literacy rate. This was followed by 57% who chose the country’s strategic location, and 55% who cited its political stability. When it comes to specific sector, more than half of investors (55%) said financial services is one of the most attractive sectors in Vietnam, while 50% selected technology. The next most popular was real estate (40%).

Dragon Capital is predicting annual GDP growth for Vietnam of over 7% in 2022, potentially even beyond 9% under certain scenarios. The asset manager also said it expects that inflation will be kept under 4.5% in 2022, compared to 1.8% for 2021.

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