What investment strategy for 4Q2025?

The key question for investors now is what strategy should be pursued to turn those expectations into reality.

One of the most anticipated developments for Vietnam’s stock market is the chance to be upgraded from a frontier market to an emerging market. FTSE Russell is scheduled to make an announcement on October 7, and many financial experts believe Vietnam may receive notification of an upgrade in this review. The scenarios being discussed range from an announcement with the upgrade taking effect in March next year, to an immediate effective upgrade in this review period.

Alongside this hope, the broader economic outlook is also fueling optimism. According to Lê Thành Hưng, Chief Investment Officer of UOB Asset Management Vietnam, the Vietnamese economy is set to continue strong growth through 2025, thanks to domestic economic stimulus via public investment, credit expansion, and a recovery in both domestic consumption and the real estate sector. These, he said, are the factors that will keep Vietnam’s stock market on a positive trajectory.

“We maintain a positive outlook for Vietnam’s stock market in the second half of 2025,” Hưng noted, “based on solid economic growth prospects, robust government policies to spur growth, and the potential of a market upgrade.” The government is expected to continue accelerating public investment and maintain an accommodative monetary stance, with credit growth targeted at 16 percent to achieve GDP growth of between 8.3 and 8.5 percent this year. At the same time, legal bottlenecks in real estate are being cleared, helping to restore confidence in the market.

Hưng added that he expects Vietnam to be upgraded to Emerging Market status this year, which would attract significant capital inflows from global investment funds. The easing of U.S. tariff concerns has also reduced pressure on Vietnam’s exports, maintaining competitiveness and supporting the stability of foreign direct investment inflows.

Nevertheless, risks remain. According to Hưng, potential challenges include the unpredictability of President Trump’s tariff policies, ongoing geopolitical tensions that could reignite global inflation, and exchange rate volatility. The Vietnamese đồng has been among the weakest regional currencies since the start of the year, making it a key factor to watch.

If Vietnam’s stock market is indeed upgraded in September, the next question is how it will unfold. Hưng believes the outlook would be very positive. The first impact would be a substantial inflow of foreign capital—both from ETFs, estimated at around one billion U.S. dollars, and from active funds—into the market. This would significantly boost liquidity and improve the ability of Vietnamese companies to raise capital. An stock market upgrade would also generate positive sentiment among domestic investors, encouraging local capital flows to remain dominant.

Beyond that, it would put pressure on regulators to accelerate reforms in trading, settlement, ownership, and the legal framework, laying a stronger foundation for the sustainable development of the market. This would also serve as an important step toward meeting MSCI’s criteria for a future upgrade.

When discussing investment strategies for the last quarter of the year, Hưng explained that UOB Asset Management Vietnam is focusing primarily on sectors and companies tied to the domestic market, with limited dependence on exports and direct benefits from the government’s expansionary fiscal and monetary policies.

Banking continues to benefit from high credit growth targets in 2025 and remains a heavyweight in the VN-Index. The securities industry is buoyed by the potential market upgrade and the licensing of digital asset exchanges. Technology and logistics are benefiting from global supply chain realignments, while construction and building materials are being driven by the strong disbursement of public investment. Retail and consumer goods are supported by rising domestic purchasing power and the recovery of international tourism. Meanwhile, the real estate sector is regaining momentum thanks to the easing of legal obstacles.

Hưng also highlighted the performance of UOBAM Vietnam’s two funds. The UVEEF equity fund, which integrates ESG assessments into its investment process, posted a 14.1 percent gain in August, outperforming the VN-Index by 2.2 percent. Since its launch on November 8, 2022, through the end of August 2025, the fund has delivered a remarkable cumulative return of 77.8 percent, outpacing the VN-Index by 6.4 percent. The UVDIF balanced fund, which combines 30–40 percent equities with 60–70 percent fixed-income assets such as bonds and targets investors with lower risk appetite, grew 4.3 percent in August and 8.9 percent since its inception in August 2024 through August 2025.

“Given the positive outlook for market growth ahead, with an active management strategy focused on beneficiary sectors and companies, combined with disciplined risk management, we believe the UVEEF equity fund will continue to deliver strong performance in the remaining months of the year,” Hưng said. “As for the UVDIF balanced fund, with its focus on stable periodic income and long-term capital growth potential, we are confident it will continue to generate returns more attractive than bank deposits.”