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Electronics and High-Tech Instead of Textiles – Vietnam’s Economy Is Increasingly Focused on Complex Value Creation, Says Mario Timpanaro. The Fund Manager of the Lumen Vietnam Fund at Aquis Capital Talks About the Ambitious Reform Program, Potential Risks, and the Advantages of Trump’s Tariff Policy.

Mr. Timpanaro, Vietnam is considered a country on the rise. What is happening specifically?

Mario Timpanaro: We are currently experiencing the next stage of Doi Moi – a paradigm shift. In 1986, the focus was on opening up to entrepreneurship. Today, it is about efficiency and productivity. Three things are central: First, industry is increasingly relocating to Vietnam. In northern Vietnam around Hải Phòng and in the south around Ho Chi Minh City, new clusters for electronics and component manufacturing are emerging. Second, the government is accelerating major projects in infrastructure, ports, and energy supply. This lowers costs and increases competitiveness. Third, domestic consumption is growing at double-digit rates. Modern retail, e-commerce, and tourism are developing an entirely new dynamic.

Which sectors are driving the economy?

Timpanaro: Vietnam has long since diversified beyond the classic “textile-shoe path.” Today, electronics and high-tech account for a growing share – now over a quarter of GDP. In addition, banks, insurance, logistics, infrastructure, IT services, and fintech are contributing. Textiles remain important for employment, but the direction is clear: more value creation, less reliance on low labor costs.

What makes Vietnam attractive for investors?

Timpanaro: For the Lumen Vietnam Fund, we look at three factors: structural growth, reform dynamics, and geopolitical relevance. The country has a young, well-educated population, benefits from the “China-Plus-One” trend, and remains fiscally disciplined. Government debt is at 35 percent of GDP, a low level compared with global debt dynamics. For investors, this means: Vietnam is no longer just a frontier market but an emerging market with a broad, investable universe of listed companies, high returns on capital, and improved governance.

Where are the risks?

Timpanaro: Difficulties lie in implementation and energy supply. Reforms must continue consistently, and the electricity supply must keep pace with growth. Externally, weak demand and tariffs are a burden. The interconnection between real estate and banks also remains a potential risk factor. For investors, this means: balance sheet quality, cash flows, and transparency are decisive. At Lumen Vietnam, we have a competent, experienced, and local analyst team that monitors companies closely on the ground. This gives us a clear advantage in a still inefficient market.

Vietnam has not been spared from Trump’s tariffs. Curse or blessing?

Timpanaro: In the short term, tariffs are a margin headwind in tariff-sensitive segments. Compared with some regional competitors, however, Vietnam is in a better position. The agreed tariff rate of 20 percent is manageable. Companies can enforce their prices better through diversified supply chains, higher quality, and more reliable delivery times. Overall, tariff policy has accelerated the diversification of production to Vietnam and, in the medium to long term, is more of a catalyst than a brake, despite short-term volatility.

In September, FTSE Russell may upgrade Vietnam to “emerging market.” What would that mean?

Timpanaro: One must not compare the dimension with an MSCI inclusion. The capital inflows will be modest. But the symbolic power is significant. It is a clear signal that Vietnam can no longer be ignored by international investors. Passive money will flow in, but more interesting is that active managers will have Vietnam more firmly on their radar. What remains decisive is that the fundamental story holds – and it does: growth, reforms, demographics, and a growing number of investable companies. The fact that our Lumen Vietnam Fund has risen significantly more this year than most other emerging markets, which are also in a bull market, underlines this dynamic impressively.

Source: https://www.dasinvestment.com/vietnam-zuendet-eine-weitere-stufe-von-doi-moi/

Vietnam continues its reform course Doi Moi with determination and offers equity investors a broad universe of high-return companies. A conversation with Mario Timpanaro, fund manager of the Lumen Vietnam Fund at Aquis, about the country’s progress, potential risks, and Vietnam’s upgrade to an emerging market.

Mr. Timpanaro, Vietnam is considered a country on the rise. What is happening specifically?

Mario Timpanaro: We are currently experiencing the next stage of Doi Moi – a paradigm shift. In 1986, the focus was on opening up to entrepreneurship. Today, the focus is on efficiency and productivity. Three things are central: First, industry is increasingly relocating to Vietnam. In northern Vietnam around Hải Phòng and in the south around Ho Chi Minh City, new clusters for electronics and component manufacturing are emerging. Second, the government is accelerating major projects in infrastructure, ports, and energy supply. This lowers costs and boosts competitiveness. Third, domestic consumption is growing at double-digit rates. Modern retail, e-commerce, and tourism are developing an entirely new dynamic.

Which sectors are driving the economy?

Timpanaro: Vietnam has long since diversified beyond the classic “textile-shoe path.” Today, electronics and high-tech account for a growing share – now over a quarter of GDP. In addition, banks, insurance, logistics, infrastructure, IT services, and fintech are contributing. Textiles remain important for employment, but the direction is clear: more value creation, less dependence on low labor costs.

What makes Vietnam attractive for investors?

Timpanaro: For the Lumen Vietnam Fund, we look at three factors: structural growth, reform dynamics, and geopolitical relevance. The country has a young, well-educated population, benefits from the “China-Plus-One” trend, and remains fiscally disciplined. Government debt stands at 35 percent of GDP, a low level compared to global debt dynamics. For investors, this means: Vietnam is no longer just a frontier market but an emerging market with a broad, investable universe of listed companies, high returns on capital, and improved governance.

Where are the risks?

Timpanaro: Challenges lie in implementation and energy supply. Reforms must continue consistently, and electricity supply must keep pace with growth. Externally, weak demand and tariffs are a burden. The interconnection between real estate and banks also remains a potential risk factor. For investors, this means: balance sheet quality, cash flows, and transparency are decisive. At Lumen Vietnam, we have a competent, experienced, and local analyst team that monitors companies closely on the ground. This gives us a clear advantage in a still inefficient market.

Vietnam has not been spared from Trump’s tariffs. Curse or blessing?

Timpanaro: In the short term, tariffs are a margin headwind in tariff-sensitive segments. Compared with some regional competitors, however, Vietnam is in a better position. The agreed tariff rate of 20 percent is manageable. Companies can better enforce their prices through diversified supply chains, higher quality, and more reliable delivery times. Overall, tariff policy has accelerated the diversification of production to Vietnam and, in the medium to long term, is more of a catalyst than a brake, despite short-term volatility.

In September, FTSE Russell may upgrade Vietnam to “emerging market.” What would that mean?

Timpanaro: One must not compare the dimension with an MSCI inclusion. The capital inflows will be modest. But the symbolic power is significant. It is a clear signal that Vietnam can no longer be ignored by international investors. Passive money will flow in, but more interesting is that active managers will have Vietnam more firmly on their radar. What remains decisive is that the fundamental story holds – and it does: growth, reforms, demographics, and a growing number of investable companies. The fact that our Lumen Vietnam Fund has risen significantly more this year than most other emerging markets, which are also in a bull market, underlines this dynamic impressively.

Source: https://www.private-banking-magazin.de/von-der-werkbank-zum-hightech-standort/

Infrastructure, Innovation and Investment: Vietnam is Becoming Increasingly Attractive to Investors

With ambitious growth targets and multi-billion dollar investments, Vietnam is positioning itself as Asia’s new economic engine, says Mario Timpanaro, Portfolio Manager of the Lumen Vietnam Fund.

Mr. Timpanaro, the Vietnamese government has raised its GDP forecast for 2025 to 8 percent. Is that realistic?

Mario Timpanaro: The growth target is ambitious, but certainly achievable—especially in light of the government’s strong push for infrastructure investment. The authorities have shown determination to accelerate infrastructure development to fully unlock the country’s growth potential. We believe these investments could contribute between 1 and 1.5 percentage points to GDP over the next few years.

This includes the expansion of Terminal 3 at the central airport in Ho Chi Minh City—scheduled to open on April 5—as well as the new airport south of the city, expected to be completed in the first half of 2026. Additionally, nine new metro lines are planned, with the first line successfully commissioned at the end of 2024. A major city cannot thrive without a well-functioning metro system. The highway network is also being expanded with significant effort, which will ultimately benefit both logistics and tourism. On top of that, a major high-speed rail project is underway to connect the capital Hanoi with the economic center Ho Chi Minh City—an investment of USD 67 billion, expected to be completed by 2035.

During your last visit, optimism regarding domestic growth seemed to lag behind market expectations. What is needed to reverse this trend?

Timpanaro: We’re noticing that people are saving more. While new car registrations rose slightly by 2.6 percent last year, there is still a degree of restraint when it comes to purchasing durable goods. Sales of electronic components are also lagging behind expectations, although exports of these goods have increased significantly. This cautious sentiment is reflected in the PMI index, which has remained below the 50-point threshold for the past three months—49.2 in February. Domestic consumption contributes a significant 55 percent to GDP.

A very positive economic development is the recovery of tourism: overnight stays increased by 30 percent in the first two months of 2025. In addition to visitors from Southeast Asia, we are seeing strong demand from Europe—particularly from Germany. Tourism already accounts for approximately 8 percent of GDP.

In addition to the traditional manufacturing sector, Vietnam seems to be making inroads into advanced industries such as semiconductors and AI. How do you view this development?

Timpanaro: It’s an extremely exciting trend. Vietnam has not only established itself as a manufacturing hub, but is also gaining prominence in advanced industries such as semiconductor production and artificial intelligence. Major tech companies including Samsung, Intel, LG, Apple, and Google have built production facilities in Vietnam. This reflects not only the country’s competitiveness but also its growing capacity for innovation. Particularly noteworthy is Nvidia’s establishment of an AI research center in Hanoi—reinforcing Vietnam’s ambition to become a leading AI hub in Southeast Asia.

Despite the optimism, concerns remain around tariffs and trade policy. How is the government addressing these issues?

Timpanaro: While U.S. tariffs are creating uncertainty globally, Vietnam remains relatively calm—partly because it brings strong bargaining chips to the negotiating table, including potential offsetting deals worth several billion USD. With its so-called “bamboo diplomacy”—flexible yet firm—the Vietnamese government is skillfully navigating geopolitical tensions. Compared to direct competitors such as China, tariffs on Vietnamese exports remain relatively low.

How important is Vietnam for investors in the Asian region?

Timpanaro: Vietnam currently offers one of the most compelling investment opportunities in Asia, especially considering its robust economic growth and impressive recovery in corporate earnings. For the Lumen Vietnam Fund, we anticipate earnings growth of 17 percent per share, with a price-to-earnings ratio of just 11.9. GDP growth is expected to reach 7 percent this year—something Europe can only dream of. Vietnam provides strong diversification for any portfolio, as its correlation with most major global indices is very low.

What is your assessment of the Vietnamese stock market?

Timpanaro: We’re seeing domestic investors return to the market. Average daily trading volume is around USD 800 to 900 million. After a prolonged sideways movement between 1,260 and 1,300 points, the market has recently broken upward. Several factors are driving this: one is the launch of the new KRX trading system, which enables intraday trading and is expected to boost liquidity. A more significant catalyst is the anticipated upgrade of Vietnam to emerging market status by FTSE in September 2025, which will bring renewed momentum. A reclassification by MSCI is expected within the next one to two years and would provide a much larger boost to the Vietnamese equity market.

How stable is the government in Hanoi, and what is it doing to attract international investors?

Timpanaro: The government is very stable. On the one hand, it is taking the necessary steps to ensure rising prosperity in this emerging country—an effort that is being positively received by the population. On the other hand, it is earning credibility and building transparency with international partners. Whether through infrastructure, innovation, or ambitious investments—Vietnam is becoming increasingly attractive to investors. It is therefore not surprising that foreign direct investment has performed so well: in 2024, a record USD 25.35 billion flowed into the country. Whereas in the past, international companies were the ones relocating production from China to Vietnam, we are now seeing—already since Q4 2024—Chinese companies following this trend as well, out of concern about U.S. tariffs. We expect this trend to continue for the next few years before any consolidation may occur.