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vietnam: growth, transformation and the role of active equity funds

Vietnam: Growth, Transformation and the Role of Active Equity Funds

Vietnam: A Growing Market for Forward-Looking Investors

Vietnam is no longer an insider tip among Asian markets – it has become a dynamic hotspot for investors worldwide. With stable economic growth above 7%, a growing middle class, massive infrastructure spending, and an active stock market culture, the country is increasingly attractive for long-term investment strategies.

As Mario Timpanaro, fund manager of the Lumen Vietnam Fund, emphasizes, government investments in infrastructure are expected to rise by 70% in 2025 – a stimulus that could increase GDP by 1 to 1.5 percentage points. At the same time, domestic consumption is expanding, already accounting for 55% of economic output.

Vietnam Equity: More Than Just Growth

With approximately 100 million inhabitants, an average age of 33, and rising prosperity, Vietnam offers enormous consumption potential. Companies in the tech, consumer, and financial sectors are benefiting strongly – as are investors who enter this market early.

Funds such as the Lumen Vietnam Fund, one of the biggest Vietnam equity funds in the DACH region, provide access to high-growth companies. With over USD 350 million in assets under management, an active strategy, and a focus on small and mid caps, it has positioned itself as a high-performing active equity fund.

Global Trends Support Vietnam: China-Plus-One and Bamboo Strategy

Vietnam is benefiting significantly from geopolitical shifts. The so-called China-Plus-One strategy pursued by many international corporations is leading to a relocation of production to Vietnam – a trend further accelerated by U.S. tariffs on Chinese goods. Chinese companies themselves are now investing directly in Vietnam to maintain access to global supply chains.

Vietnam is following a “bamboo strategy”: flexible in dealing with major powers while remaining firmly rooted in national stability. This balance gives the country geopolitical room to manoeuvre and makes it especially attractive to international investors.

Vietnam’s Equity Market: Frontier with Emerging Potential

Despite increasing liquidity and over 1,600 listed companies, Vietnam is still classified as a frontier market. However, according to Timpanaro, an upgrade to emerging market status is imminent – possibly as early as 2025 with FTSE, and from 2027 with MSCI. For investors in Vietnam public equity, this could mean fresh capital inflows – and therefore further upside potential.

Market valuations remain attractive: Vietnamese stocks are cheaper than comparable Asian equities. At the same time, market capitalization continues to rise. Funds like the Lumen Vietnam Fund that invest early in undervalued companies could benefit significantly.

Focus on Small and Mid Caps – with ESG and Governance

A key success factor of the Lumen Vietnam Fund is the combination of local expertise, active selection, and an ESG-oriented strategy. As a Vietnamese equity fund with Article 8 classification, the fund deliberately invests in companies with high governance standards.

“Good corporate governance is the key to sustainable growth in frontier markets,” says Timpanaro. That is why the 12-member analyst team in Ho Chi Minh City focuses on identifying companies early – before the broader market recognizes and revalues them.

The ESG strategy is not merely theoretical: since 2013, the fund has followed a clear governance-first approach – a factor that ensures long-term resilience in emerging markets like Vietnam.

Fund Profile: Lumen Vietnam Fund – Access to a Dynamic Market

With 30–40 positions, the fund’s portfolio is broadly diversified and focused on stable, high-growth sectors: finance, consumer staples, technology, and industrial parks.

The fund has achieved an annualized return of nearly 10% since inception, with low correlation to the MSCI World, MSCI Emerging Markets, or EURO STOXX. As such, the fund not only acts as a performance driver, but also as a diversification component within a portfolio.

As one of the best performing Vietnam equity funds, the Lumen Vietnam Fund offers institutional and private investors active access to one of Asia’s most compelling markets – with a strong focus on fundamental analysis, governance, and sustainability.

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