VanEck Vietnam ETF

VNM

Market cap $587M

VanEck Vietnam ETF provides U.S. investors with liquid, broad exposure to Vietnam's rapidly growing equity market amid shifting global manufacturing trends. VNM tracks the MarketVector Vietnam Local Index, capping single holdings at 8% and focusing heavily on liquidity. The ETF's liquidity, options market, and U.S. exchange listing offer significant advantages over direct investment in Vietnamese stocks, despite a high 0.68% expense ratio.

A weakening greenback is being compounded by global de-dollarization and lower interest rates, creating an environment for emerging markets (EM) ETFs to prosper. In turn, more investors are flocking into EM equities, but for more targeted exposure, South Korea could present an intriguing alternative.

Last week FTSE made its annual review of country classification within its global equity indices (see the announcement here). One of the most interesting changes was Vietnam's upgrade from frontier to emerging market.

On Oct 10, 2025, Wall Street saw about $2 trillion in market value wiped out. However, ETFs like SIVR, TAIL, URA, PZA, and VNM held steady.

Vietnam's footwear exports to the United States plunged 27% in September to $611 million, marking the steepest decline among all sectors following the implementation of tariffs by the U.S. government, according to customs data released Monday.

The VanEck Vietnam ETF remains a "Buy," with 15% more upside expected before the current bull run pauses. VNM benefits from strong momentum, a diversified portfolio across styles and caps, and a reasonable 16.5x P/E valuation. Risks include portfolio concentration, high volatility, and heavy real estate exposure, making VNM best suited as a speculative satellite position.

The Vietnam trade deal removes major tariff threats, providing clarity for U.S. companies like Nike, Inc., but the positive impact is already priced in. Nike's tariff-related cost reduction is meaningful, but with forward valuations peaking, I rate the stock a Hold for now. Vietnam's economy benefits from the deal, but the VanEck Vietnam ETF's limited manufacturing exposure means the news isn't a strong buy catalyst.

President Trump's Vietnam "trade deal" raises tariffs to 20%, doubling costs for U.S. importers and potentially hurting demand for Vietnamese exports. VNM ETF remains heavily weighted toward domestic sectors like Financials and Real Estate, which won't directly benefit from the trade deal. Higher tariffs may actually be a headwind for Vietnam's economy, reducing the ETF's appeal versus alternatives like China.

Steven Quattry, Morgan Stanley Investment Management says a number of emerging markets are undergoing structural reforms, hence attracting foreign capital.

After a difficult 2024, VNM ETF has surged by 14% YTD, outperforming its global and Asian EM peers,. Recent infrastructure improvements and regulatory changes are attracting foreign institutional interest, with a possible EM upgrade in September expected to drive even more interest. Risks remain due to Vietnam's export dependence and looming US tariff threats, which could significantly impact GDP and market sentiment.