What can overseas Vietnamese invest in with 2 billion VND?

According to experts, those residing abroad with 2 billion VND in idle funds to invest for two years or more can choose real estate and stocks.

I am currently living abroad, have been settled for a long time, and have no intention of returning to Vietnam in the near future. I have 2 billion VND (Vietnamese Dong) in spare cash and am looking to invest in Vietnam. Currently, I see that interest rates are too low, so I'm considering buying land, apartments, or investing in stocks. I've seen many analysts say that both of these options are currently at a low price point, suitable for long-term investment. I would appreciate any expert advice.

Phung Tran

Transactions at a bank in Ho Chi Minh City, November 2022. Photo: Thanh Tung

Consultant:

Assuming you already have a financial plan and have 2 billion VND in spare cash for investment over at least two years, you could choose either the stock market or real estate.

In 2024, the stock market showed many optimistic signs, stemming from macroeconomic policies in Vietnam and the world. Based on data on employment, unemployment rates, and inflation, the US Federal Reserve (Fed) indicated a reversal in monetary policy with the possibility of cutting interest rates. This would ease the outflow of foreign capital from Vietnam, reducing pressure on the exchange rate for the State Bank of Vietnam, thereby creating room to implement a loose monetary policy and increase the money supply. Furthermore, low interest rates are a major driving force, making the stock market more attractive.

2024 will present many challenges, but also numerous opportunities for investors. The stock market acts as a barometer, always anticipating market recovery. In the current market context, inflation is relatively stable, and the P/B (price-to-book ratio) is around 1.6 – below the Vietnamese market average of 2.1 – making most large-cap stocks relatively cheap. Therefore, a significant decline in the VN-Index is unlikely, creating room for strong growth in the medium and long term.

Depending on your knowledge and experience in this investment area, you can choose to invest in individual stocks yourself, seek professional advice, or invest in mutual funds. Mutual funds, managed by qualified and experienced professionals from fund management companies, are suitable for young investors with little experience in the market.

The application process is now quite simple; you can open an account and authorize investments even while abroad. This allows you to focus on your core business to generate a good income while still achieving asset growth in Vietnam.

For real estate investment, you should maintain a lower proportion of your 2 billion VND capital. If your monthly income is stable, you can consider using financial leverage. When investing in apartments at an early stage, the initial capital requirement is not high; you can gradually supplement it from your overseas income to pay according to the schedule. You need to choose a reputable project developer to ensure the apartment can be completed on time.

The ideal real estate segment for long-term investment with small capital is agricultural land with a portion designated for residential use, or residential land in rural areas, particularly in provinces adjacent to major cities. The potential for profit from real estate investment largely depends on location, land use planning, nearby infrastructure, amenities, and surrounding population.

It's quite important to note that real estate investment involves legal matters concerning land use rights and housing on the land. When you are abroad, you need to consider the possibility of returning to Vietnam to complete the legal procedures related to the purchase and sale. Authorizing someone to buy or sell real estate is relatively complex and carries risks if not done correctly. Transactions should be conducted through reputable exchanges to receive professional and legal support, ensuring a smooth and successful buying and selling process.

The real estate market has the characteristic of recovering after the stock market. Therefore, in the current period, you should allocate a large proportion of your investment capital to stocks or mutual funds, waiting for the right time to invest in real estate. It's also important to note that both of these channels require medium to long-term investment timeframes. Having a financial plan will help you avoid premature liquidation of investments, which would reduce investment returns compared to expectations.

Tran Thi Mai Han
Personal Financial Planning Expert
FIDT Investment Consulting and Asset Management Company

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