Small investors are not interested in investing through funds.

Although the number of foreign investment accounts is increasing, their trading accounts for only 0.5% of the market. The fund management industry in Vietnam has a high growth rate but total assets under management are still low compared to the region.

Minister of Finance Nguyen Van Thang (far right) talks with investors at the conference - Photo: Contributor

Speaking at the conference "Investment Funds and Foreign Investment in Vietnam's New Development Era" organized by the Ministry of Finance on the morning of March 28, Mr. Nguyen Van Thang - Minister of Finance - said that the scale of Vietnam's economy is at 476.3 billion USD, ranking 33rd in the world.

Only about 1% of investors choose to invest through open-end funds.

However, the participation of foreign investors in the market is still not commensurate with its potential. Although the number of investors in the stock market is constantly increasing, foreign investors' trading accounts only account for 0.5%.

According to Ms. Vu Thi Chan Phuong, Chairwoman of the State Securities Commission (SSC), the country has about 43 fund management companies and 123 securities investment funds, with total assets under management of more than VND750,000 billion, more than 7 times higher than in 2014.

Although the fund industry has maintained an average growth rate of over 20% per year over the past decade, total assets under management only account for nearly 6% of GDP, significantly lower than the region.

"Small investors are not interested in investing through funds but mainly do it directly and control their own transactions," said Ms. Phuong.

According to Mr. Don Lam, founding shareholder and general director of VinaCapital, only about 7% of the Vietnamese population has a securities trading account, but individual investors dominate trading in the stock market. Only about 1% of investors choose to invest through open-end funds.

He commented that the fund management industry in Vietnam is modest in scale and has low fund penetration. Professionally managed funds account for about 3.5%, while in the bond market, professionally managed funds account for less than 17%.

"This creates high costs and market volatility. In the long term, the market needs more institutional investors, while encouraging individuals to entrust their capital to professional funds for management," said Mr. Don Lam.

Foreign investors reduce interest

Mr. Don Lam, founding shareholder and general director of VinaCapital - Photo: HONG PHUC

In fact, the number of foreign investors participating in the Vietnamese stock market is not much and tends to decrease. According to Mr. Don Lam, one of the main reasons is that from 2019 to now, there have been no large IPOs, which usually attract the attention of foreign investors.

This also limits the ability of private enterprises to raise long-term capital. He gave an example of an investment deal 20 years ago.

At that time, Kinh Do's confectionery products, although of high quality, could not compete with Thai products because of their unattractive packaging.

"I met the Kinh Do brothers and invested in them, helping them buy machinery and upgrade packaging to compete with Thai goods. That is an example to show that the fund is very important in helping the Vietnamese private sector develop," said Mr. Don Lam.

A representative of the State Securities Commission said the committee has a project to restructure investors, which means increasing the number of organized investment funds and reducing the proportion of individual investors to ensure market stability.

The second project being implemented is to train investors through propaganda and dissemination of knowledge about securities investment funds, helping investors who do not understand both the benefits and risks.

This also contributes to changing investment habits for non-professional investors to invest in professional funds, as well as from speculation to long-term investment.

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Source: https://tuoitre.vn/nha-dau-tu-nho-le-chua-man-ma-dau-tu-qua-quy-20250328115249167.htm