From the workshop to a high-tech hub

Vietnam presents itself as a fast-growing hub in Asia: a young demographic, rising wages and rapid productivity growth, massive direct investment, and the relocation of global supply chains are fueling industry, domestic consumption, and a modernizing capital market infrastructure. Mario Timpanaro explains how AQUIS Capital translates these structural growth drivers into focused investments with on-site research and a consistently active approach.

Vietnam is noticeably moving into the spotlight: The economy is growing strongly, international corporations are expanding their production there – and with the new stock exchange system (KRX) in operation since May 5, 2025, the market appears more modern and fluid than before. At the same time, index providers like FTSE and MSCI are taking a closer look, which promises additional tailwind. In this context, we speak with Mario Timpanaro of AQUIS Capital about opportunities, valuations, and the next growth drivers.

AQUIS Capital, an independent asset management firm based in Zurich, has been relying for years on close market access to Ho Chi Minh City, combining hard fundamentals with disciplined entry and exit management, and investing in Vietnam's key themes such as industrialization, urbanization, domestic consumption, and the financial sector. The in-house Lumen Vietnam Fund is structured as a UCITS and has demonstrated impressive performance since its launch. In short: an active approach with clear local expertise for a country that is currently taking the next leap in development.

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Mr. Timpanaro, many professionals know the story broadly. From the perspective of an active equity manager, why is Vietnam relevant right now—exclusively from an economic and market structure perspective?

Mario Timpanaro:

Southeast Asia is currently the fastest-growing region in the world. Vietnam stands out in particular:GDP growth reached 7.6% in the first half of 2025.The shift of global supply chains out of China is in full swing – the pandemic has accelerated this process, and Donald Trump's two terms in office have further fueled it.

Almost all major multinational companies now have a production facility in Vietnam or have concrete plans to relocate capacity there. This is also reflected in foreign direct investment, which reached a new all-time high in the first eight months of this year.

For equity investors, the valuation level (P/E ratio) remains attractive because fundamentals and market technicals are moving in the same direction.

On the macro side, solid growth forecasts suggest that earnings in the banking sector, consumer goods and real estate can continue to rise.

At the same time, market infrastructure has made quantum leaps in recent years. The new KRX trading system has been in operation since May 5, 2025, with noticeable effects on settlement, efficiency, and market scalability. For active managers, this combination measurably improves investability—not just as a narrative, but as visible in higher liquidity, greater turnover, and more reliable processes.

The new trading system has a capacity of USD 5 billion in trading volume per day; current daily turnover is around USD 1.5 billion. This development is crucial for the planned upgrade by MSCI, which is expected to generate significant capital inflows.

In short,the combination of macroeconomic growth and microstructural improvement creates an exceptionally favorable environment for active investors.

If you sort the next few years by drivers: Where do you think the next wave of earnings will come from?

Mario Timpanaro:

We see two independent but complementary revenue streams—precisely what makes Vietnam so exciting at the moment. They run along two lines:

From outside to inside:

The ongoingrelocation of global supply chainsis attracting more and more technology and industrial sectors to Vietnam. The country is rapidly moving up the value chain and developing into a preferred location for products with a higher level of vertical integration. This increases the share of local productivity, further enhancing the attractiveness of the location and making a significant contribution to GDP growth.

From inside to outside:

Agrowing middle classsupports domestic consumption – it already accounts foraround 55% of GDP, one of the highest levels in Southeast Asia. At the same time, digitalization is gaining momentum in the private sector: For example, purchase orders on the stock exchange can now be conveniently placed via smartphone. The government has recognized digitalization as an important source of efficiency and plans to consistently expand this process to the administrative level. The planned reduction of the number of provinces from 63 to 34 is a significant step in this regard and a clear signal of the direction of travel.

Many people talk about an “upgrade” – what is realistic when looking at index providers?

Mario Timpanaro:

It's important to distinguish between the FTSE and MSCI. FTSE Russell has had Vietnam on its watchlist for a move from frontier to emerging markets since 2018. We expect the announcement in October and implementation no earlier than the first quarter of next year, 2026, and no later than September 2026.

MSCI is known to remain methodologically stricter – its primary concern is the equal treatment of foreign investors and domestic investors. The government must pave the way here, for example, by introducing so-called "non-voting shares" or similar systems. We expect this to be readyin the next two to three years. Therefore, it was all the more important to have already successfully introduced the new trading system on the stock exchange.

What distinguishes AQUIS from other Asian managers in its access to this market? What does your investment process look like?

Mario Timpanaro:

Our independence and consistency in the investment process. We rely on our highly qualifiedteam of analysts based in Ho Chi Minh Cityfor fundamental analysis . It's amix of fundamental and chart analysis, which we use to ensure the perfect timing for entering and exiting positions in the Lumen Vietnam Fund.

We were also the first to introduce sustainability into the investment process (2013), thus complying with Article 8 of the EU regulation. Furthermore, we were one of the first fund managers to receive the UCITS label, which represents another milestone for us.

These two criteria make it all the more challenging, yet also profitable, to structure a portfolio over the long term. Ourpriority is always to strike the right balance between risk and reward, which we have achieved extremely well in recent years.

In times of high volatility, it is a MUST to actively manage the portfolio; this is the only way to generate significant added value for our investors.

What themes or sectors do you invest in?

Mario Timpanaro:

Since we don't have a benchmark, our portfolio allocation differs from the index. Our investment themes are, in brief, industrialization, urbanization, domestic consumption, and the financial sector.

Specifically, we are involved in the following sectors according to the following criteria:

We invest in retail banks and insurance companies that benefit from thegrowing lending and pension market. In the industrial and infrastructure sector, our focus is onenergy, transportation, logistics, and construction—the cornerstones of industrial expansion in Vietnam.

The megatrend of urbanization is reflected in investments inaffordable housing, shopping centers, and service sectors, which are directly supported by rising middle-class incomes.

Another focus is on industrial parks, which benefit greatly from foreign direct investment and are a key component of the global supply chain shift to Vietnam. In the technology sector, we focus on companies that increase efficiency and productivity – for example, in the areas of digitalization, automation, and financial technology.

What do you think is the major driver of the economy in Vietnam?

Mario Timpanaro:

Here, I would like to highlight the strong performance of the government in Hanoi. The government's budget is very healthy, and thedebt-to-GDP ratio is only 35%.

This gives the government sufficient flexibility to invest in the country's reforms. This benefits not only the population, but also the economy and the rapidly growing tourism sector, which currently accounts forabout 8-9 percent of gross domestic product.

The Vietnamese government's growth target of 8-10 percent by 2030 is certainly very ambitious, but certainly achievable.

Furthermore, the government has successfully concluded new and significant trade agreements with numerous countries in recent years through its so-called "Bamboo Strategy." At the same time, we are experiencing a revival of domestic consumption, which is providing additional momentum for the economy.

Finally: your condensed pitch to (professional) investors?

Mario Timpanaro:

Vietnam offers an excellent opportunity, especially for investors seeking new investment opportunities for diversification reasons – as confirmed, for example, by the correlation with the Euro Stoxx, which is just 0.28%.

Furthermore, the valuations in the Lumen Vietnam Fund for 2026 are also moderate at a factor of around 11.8 times with an EPS of around 17%.

The fund offers daily liquidity and can be subscribed for in various currency tranches. The euro tranche is hedged against the US dollar with a three-month swap. Since its launch in 2012, the actively managed fund has generated anaverage return of 10.26% (USD retail tranche as of September 30, 2025). We are confident that we can continue to build on this success.

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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/

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.