Foreign ETFs of $700 million thrive thanks to Vingroup stocks, why are they still experiencing capital outflows?

Since the beginning of 2025, the foreign ETFs VNM and FTSE, with a total scale of nearly $700 million, have recorded impressive performance with over 11%, surpassing the VN-Index (4%). This success is attributed to the Vingroup stocks, which account for about 30% in VNM and 20% in FTSE. Despite their achievements, both funds are still facing significant capital outflows: VNM recorded a withdrawal of $61 million, while FTSE faced $18 million from the beginning of 2025. The withdrawal reasons partly stem from the inability to purchase stocks with closed room limits, which prevents sustainable performance growth. Additionally, a lack of diversity in their portfolios and a global trend of capital withdrawal from frontier markets hinder their ability to attract foreign investment. However, with many companies preparing to list and the economy transforming, prospects for Vietnam’s stock market look promising.