Vietnam’s Economic Momentum Fuels Growth for VanEck’s Leading ETF

VanEck Vietnam ETF US92189F8178

A wave of robust economic indicators and a sweeping government reform agenda, particularly targeting state-owned enterprises and the banking sector, are providing a favorable backdrop for the VanEck Vietnam ETF (VNM). This fund, with assets under management of $661.15 million as of January 23, 2026, offers physical replication of the MarketVector™ Vietnam Local Index. The current environment raises questions about the durability of this positive trend.

Recent performance data for VNM shows encouraging short-term gains. As of January 23, 2026, the fund's net asset value (NAV) had increased by 3.85% over one month and 5.38% over three months, with a year-to-date NAV return of 2.49%. The ETF demonstrates solid liquidity, evidenced by a 30-day average trading volume of 829,679 shares and a volume of 603,641 shares on the last trading day. The premium to NAV has remained contained, standing at $0.12 (0.60%) on January 23, compared to a 1.65% premium earlier in the month, indicating efficient price discovery in the market.

Portfolio Composition: Concentration and Key Holdings

The ETF's portfolio consists of 55 locally listed equities, with its ten largest holdings exerting significant influence on overall performance. These top positions, with their respective weightings as of January 23, 2026, are:
* Vinhomes (VHM): 8.73%
* Vingroup (VIC): 8.12%
* Masan Group (MSN): 6.85%
* Hoa Phat Group (HPG): 6.19%
* SSI Securities (SSI): 5.93%
* Vietnam Dairy Products (VNM): 5.82%
* Vietcombank (VCB): 5.75%
* VIX Securities (VIX): 3.85%
* Vincom Retail (VRE): 2.90%
* Vietjet Aviation (VJC): 2.73%

Sector allocation reveals a pronounced focus on two areas: Real Estate (29.14%) and Financials (28.30%). Consumer and Industrial sectors also hold notable weights. This structure means the fund's fortunes are closely tied to a handful of large-cap stocks and the cyclical performance of these specific industries.

Competitive Landscape and Valuation Context

For U.S.-based investors, choices for Vietnamese equity exposure are limited. The primary comparable product is the Global X MSCI Vietnam ETF (VNAM), which tracks a different benchmark and carries a lower expense ratio of 0.51%. Both funds, however, show substantial overlap in their major holdings. VNM maintains a dominant position in terms of assets under management, which typically supports greater trading liquidity.

From a valuation perspective, the VN-Index traded at approximately 13x expected earnings for FY26, with forecasted profit growth near 18% (resulting in a PEG ratio of ~0.7). The banking sector appears moderately valued, with a price-to-book ratio around 1.4x and a return on equity of about 17%.

Economic Drivers and Forward-Looking Considerations

The recent market strength has been propelled by several key factors. Government Resolution 79, which outlines reforms for state-owned enterprises (SOEs), is a major catalyst. This is complemented by substantial infrastructure spending, which surged 40% in 2025 and is projected to rise another 20-30% in 2026. Vietnam's economy posted strong 2025 growth of approximately 8.02% (with Q4 year-over-year growth at ~8.46%) and achieved a trade surplus. After a period of outflows, foreign investors returned as net buyers on January 26, 2026. A potential upgrade of Vietnam's market status by FTSE from Frontier to Emerging Market could trigger further capital inflows.

Investors should note that concentration risk and periodic index rebalancings remain relevant variables. In the near term, VNM's trajectory will likely depend on the pace of reform implementation, foreign capital flows, and the performance of its largest holdings. Upcoming quarterly index reviews, which may adjust constituent weightings, represent specific events for market participants to monitor.