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rethinking vietnam: growth, transformation & active fund strategies

Rethinking Vietnam: Growth, Transformation & Active Fund Strategies

Vietnam: Growth Potential, Structural Change, and Smart Strategies

Vietnam is now considered one of the most exciting investment destinations in Southeast Asia. The country not only offers dynamic economic growth but also political stability, strong domestic purchasing power, a young population, and a strategic role in global supply chains.

With nearly 100 million inhabitants and a young, consumption-driven middle class, the Vietnamese market presents long-term potential for investors specifically targeting Vietnam equity funds.

AQUIS Capital identifies three key opportunity drivers that distinguish Vietnam from other frontier markets:

Attractive Valuations and Catch-Up Potential

Vietnamese equities are undervalued in regional comparison. The price-to-earnings ratio is significantly below the Asian average. These valuation gaps open up targeted outperformance opportunities for active Vietnam equity funds.

Mario Timpanaro, fund manager of the Lumen Vietnam UCITS Fund, sees this as a crucial lever for long-term value creation:

“Vietnamese stocks are still trading at a discount. We expect a convergence with other markets through continuous growth and increasing investor confidence.”

Macroeconomic Momentum & Geopolitical Opportunities

Vietnam’s economic growth, ranging from 7–8% per year, is not only solid but also exceptional by global standards.

As the biggest beneficiary of the China-Plus-One strategy, Vietnam attracts relocations of major manufacturers such as Intel, Lego, or Google. Most recently, foreign direct investments surpassed USD 25 billion – a historic record.

Additionally, the stability of the local currency, the Vietnamese đồng – backed by high foreign exchange reserves – makes Vietnam more predictable for international investors than many other emerging markets.

Upgrade to Emerging Market Status

Vietnam is already more liquid and capital-rich than many existing emerging markets. The anticipated upgrade by FTSE by 2025 could trigger massive capital inflows – comparable to the post-upgrade performance of Kuwait or Saudi Arabia, whose markets gained over 30% after the reclassification.

An ESG-Focused Vietnam Equity Fund with a Clear Strategy

The Lumen Vietnam UCITS Fund is not only one of the biggest Vietnam equity funds with an active management approach, but also a pioneer in ESG. Since its launch in 2012, the fund has followed a sustainable investment approach aligned with Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR).

“For us, ESG is not just a label but a core element of our due diligence process,” explains Mario Timpanaro. “Especially the ‘G’ – Governance – is critical in frontier markets like Vietnam.”

Sectors such as weapons, coal, gambling, alcohol, tobacco, or deep-sea fishing are systematically excluded. Particularly noteworthy is Vietnam’s rapid rise in clean energy: the share of solar power generation has risen from 0% to nearly 11% – faster than in France or Japan.

Stock Picking with Local Expertise: The Success Model

The heart of the fund is its independent analyst team in Ho Chi Minh City. The six locally based analysts are fully integrated into the AQUIS Capital structure and operate with full independence and no conflicts of interest.

Their task: perform fundamental analysis of companies, meet with management, visit production sites, and identify undervalued opportunities at an early stage. Combined with technical analysis, this forms the basis of a true active equity fund that intentionally invests in Vietnam public equity in growth sectors.

Currently, the portfolio consists of 30–40 holdings across sectors such as:

  • Financials (27.3%)

  • Industrials (12.7%)

  • Real Estate (13%)

  • Food & Consumer Staples (11.5%)

Through regular sector rotation and clear weighting caps (no position above 5–6%), the fund maintains an asymmetric risk profile – limiting downside while preserving upside potential.

A Fund for Diversification & Long-Term Value

As an actively managed Aktienfonds Vietnam with a long-only strategy and ESG core, the Lumen Vietnam UCITS Fund is particularly well-suited for investors who:

  • seek exposure to long-term growth markets,

  • aim for a diversified portfolio,

  • value strong governance,

  • and look for low correlation with Western indices.

With an annualized return of nearly 10% since inception, a robust structure, and a market on the verge of emerging status, the fund is positioned as an ideal building block for institutional and private portfolios alike.

Conclusion: Vietnam and the Lumen Fund – Ready for the Next Leap

Vietnam is well on its way to transforming from a frontier market into one of the most dynamic emerging markets in the world. Political stability, ESG reforms, macroeconomic strength, and intelligent investment strategy together create an environment in which Vietnamese equity funds can not only survive, but thrive.

The Lumen Vietnam UCITS Fund, as one of the leading Vietnam equity funds, offers professional access to the market – with a clear strategy, ESG focus, and active, local know-how.

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