FTSE Russell Upgrades Vietnam to Secondary Emerging Market Status

Index provider FTSE Russell officially reclassified Vietnam from a frontier market to secondary emerging status on September 21, 2026. The transition into the FTSE Russell Global Equity Index Series will occur in four stages through 2027, starting with a 10% addition in September and concluding with a 35% addition by September 2027. Initial index-linked purchases were estimated at $240 million, with total capital inflows potentially reaching $6 billion to $7 billion by the end of 2027.

To mark the milestone, the Ministry of Finance and the State Securities Commission hosted celebratory events in Hanoi on September 18. Officials noted that the upgrade recognizes years of modernization and reform. In response, The Vanguard Group plans to increase its investment in Vietnam to approximately $2.5 billion over the coming years.

Despite the upgrade, some active foreign investors remain cautious. Concerns persist regarding limited market breadth, high concentration in the banking sector, foreign ownership limits, and corporate governance. Market participants view this shift as a foundation for further development, including the 2027 introduction of a central counterparty clearing mechanism. Such improvements are seen as critical steps toward a potential future upgrade by MSCI.