Retail investors are not yet enthusiastic about investing through funds.

Although the number of foreign investment accounts has increased, their transactions only account for 0.5% of the market. The fund management industry in Vietnam has a high growth rate, but the total assets under management remain low compared to the region.

Minister of Finance Nguyen Van Thang (far right) exchanges views with investors at the conference - Photo: CTV

Speaking at the conference "Investment Funds and Foreign Investment in Vietnam's New Development Era" organized by the Ministry of Finance on the morning of March 28, Mr. Nguyen Van Thang - Minister of Finance - stated that the size of Vietnam's economy is 476.3 billion USD, ranking 33rd in the world.

Only about 1% of investors choose to invest through open-ended funds.

Nevertheless, the participation of foreign investors in the market is still not commensurate with its potential. Although the number of investors in the stock market is constantly increasing, foreign investors' trading accounts only account for 0.5%.

According to Ms. Vu Thi Chan Phuong, Chairwoman of the State Securities Commission (SSC), there are approximately 43 fund management companies and 123 securities investment funds nationwide, with total assets under management exceeding 750,000 billion VND, more than seven times higher than in 2014.

Although the fund industry has maintained an average growth rate of over 20% per year for the past decade, total assets under management account for only about 6% of GDP, significantly lower than the regional average.

"Retail investors are not yet enthusiastic about investing through funds and mainly invest directly, controlling their own transactions," Ms. Phuong said.

According to Don Lam, founding shareholder and CEO of VinaCapital, only about 7% of Vietnam's population has a securities trading account, but individual investors dominate the stock market. Only about 1% of investors choose to invest through open-ended funds.

He noted that the fund management industry in Vietnam is modest in size and has low fund penetration. Professionally managed funds account for about 3.5%, while in the bond market, professionally managed funds account for less than 17%.

"This creates high costs and market volatility. In the long term, the market needs more institutional investors, while also encouraging individuals to entrust their capital to professional funds for management," said Don Lam.

Foreign investors are showing less interest.

Mr. Don Lam, founding shareholder and CEO of VinaCapital - Photo: HONG PHUC

In reality, the number of foreign investors participating in the Vietnamese stock market is not large and is trending downward. According to Mr. Don Lam, one of the main reasons is that since 2019, there have been no major IPOs, which usually attract the attention of foreign investors.

This also limits the ability of private businesses to raise long-term capital. He cited an investment deal from 20 years ago as an example.

At that time, Kinh Do's confectionery products, despite their high quality, could not compete with Thai products because their packaging was not attractive.

"I met the Kinh Do brothers and invested in them, helping them buy machinery and upgrade their packaging to compete with Thai products. That's an example to show how important funds are in helping Vietnam's private sector develop," said Don Lam.

A representative from the State Securities Commission stated that the commission has a plan to restructure the investor base, meaning increasing the number of institutional investment funds and reducing the proportion of individual investors to ensure market stability.

The second project currently underway is to educate investors through the dissemination of knowledge about securities investment funds, helping investors who lack understanding of both the benefits and risks.

This has also contributed to a shift in investment habits, moving amateur investors towards investing in professional funds, and from speculation to long-term investment.

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Source: https://tuoitre.vn/nha-dau-tu-nho-le-chua-man-ma-dau-tu-qua-quy-20250328115249167.htm