As VietNam Holding* celebrates its 20th anniversary, the trust’s manager is in a buoyant mood. The country it focuses on delivered 8% GDP growth in 2025, one of the strongest rates in the world, and has set its sights on double digits for 2026. Craig Martin, chairman of Dynam Capital, sees a compelling combination of structural reform, attractive valuations and growing liquidity that could make Vietnam one of the standout investment stories of the coming years.
‘Vietnam is firing on all cylinders – the engine’s hot and running,’ says Martin. ‘Despite the tariff noise globally, Vietnam grew its exports by around 17% last year and generated a US$20bn trade surplus. The China-plus-one theme, where manufacturers look to move production to Vietnam, remains very much on track.’
An economy in modernisation mode
The Vietnamese government is not content to rely on export momentum alone. Martin highlights that more than US$30bn of public money was invested in domestic infrastructure last year, with a powerful knock-on effect across the broader economy. Foreign direct investment into factories and facilities reached a fresh record of close to US$27bn, while a raft of government resolutions is actively encouraging the private sector to grow and state-owned enterprises to reinvent themselves.
Urbanisation, digitalisation and a rapidly expanding consumer class are themes that run through VietNam Holding’s portfolio. ‘The economy is now north of half a trillion dollars in GDP and per capita income is north of US$5,000, double where it was less than a decade ago,’ Martin notes. With over 12 million active domestic investors and a growing middle class, the domestic demand story is becoming as important as the export engine.
‘Vietnam is probably going to start the year at a slow canter and then get to a gallop by the second half.’
Navigating the tariff storm
When the US imposed reciprocal tariffs of around 46–47% on Vietnam in April 2025, the response from Hanoi was swift and pragmatic. ‘The Vietnamese delegation were on the plane to the US to negotiate,’ explains Martin. ‘They could see you’ve got a transactional president, so they got on the plane quickly and tried to negotiate the tariffs down, which they did – from around 46% to 20% fairly quickly.’
Vietnam also agreed to increase imports from the US, including agricultural inputs such as soybean, liquefied natural gas and Boeing aircraft. Crucially, around a third of Vietnam’s exports are IT products – smartphones, computers and digital accessories – which already carry low or zero tariffs. The equity markets largely shrugged off the tariff storm in the second half of 2025, and Vietnamese indices subsequently hit record highs.
Energy security is a related theme. Half of Vietnam’s energy is domestically sourced from hydropower, solar, wind, natural gas and oil. The country has rapidly scaled its renewables capacity, now generating 20% of its energy from solar and wind, up from virtually zero less than a decade ago. ‘From zero to 20% in less than a decade has been remarkable,’ says Martin.
The emerging market upgrade
One of the most eagerly anticipated developments for Vietnam’s equity market is the FTSE Russell upgrade to secondary emerging market status, with actual index inclusion scheduled for September 2026. Martin is measured about the near-term impact: ‘We haven’t seen a lot of additional major inflows yet – but the upgrade is a great marker to the fact that the government is responsible, reactive and wants foreign capital markets to develop.’
In the meantime, domestic investor enthusiasm is filling the gap. A wave of new IPOs has emerged after a prolonged drought, and interest is already building in what an eventual MSCI upgrade, a more substantial index and a few years away, might mean for inflows. Martin sees the coming years as a period of progressive opening to foreign capital, with the government signalling its commitment to attracting international investment to support its industrialisation ambitions.
A conviction-led, nimble portfolio
VietNam Holding runs a concentrated portfolio of around 25 companies, with a further 25 names actively tracked and ready to be deployed when valuations and timing are right. This disciplined approach allows the team to be nimble: taking profit when stocks surpass target prices and reallocating swiftly as new opportunities emerge.
The portfolio’s largest position is Mobile World Group, an omni-channel retail champion that accounts for around 10% of the fund, reflecting a deliberate tilt towards Vietnam’s domestic consumer economy. MB Bank, the second-largest holding, is a digital champion with around 25 million online accounts in a country of 100 million people. Banks collectively represent about 35% of the portfolio, a dramatic shift from less than 10% six years ago, as the team has identified a handful of lenders with compelling economics and sound management.
FPT, the technology and education group that was once the trust’s top holding, has been trimmed as the price appreciated but its earnings still compound at 18–20% per year. Hoa Phat, one of South-East Asia’s largest steel manufacturers, has returned to the portfolio as a direct play on Vietnam’s infrastructure build-out. Real estate remains underweight, but Martin is watchful for a rebound, which he expects may come within the next couple of quarters.
‘We’re looking for a compounding factor with a two in front of it. And that’s possible to find, even with banks.’
Growth at a reasonable valuation
The portfolio’s valuation metrics make a striking case. At around 9.5 times forecast price-to-earnings for 2026, the fund is trading at a single-digit multiple against 18–20% earnings per share growth across its holdings. The resulting price-earnings-to-growth ratio of approximately 0.5 compares favourably to an analyst convention of 1.0 as fair value. ‘We’ve got the valuation part sorted. We’ve also got growth,’ says Martin simply.
The broader Vietnamese market trades at around 13–14 times earnings when excluding a handful of high-multiple outliers, with liquidity having grown substantially in recent years to daily volumes of US$1.5–2bn. VietNam Holding itself currently trades at a modest discount to net asset value of around 6–7%, having moved from a premium earlier in 2025 as global tariff concerns unsettled markets. Importantly, investors also benefit from an annual redemption opportunity at NAV.
We would like to thank Craig Martin for sharing his views in this edition of Inside the mind of the investor.
Craig Martin has been involved in Vietnam for over 25 years. In 2005 he moved to Vietnam as an investment director and head of private equity for Prudential Vietnam (now Eastspring) and led several notable investments. Prior to Prudential, Craig was a founding member of Standard Chartered Private Equity team, and in the 1990s he ran a management consulting firm across Indochina. From 2010 to 2018 he was a managing partner and co-CEO of CapAsia, a private equity manager, investing across Asia’s emerging markets. Craig joined with Vu Quang Thinh in early 2018 to co-lead the establishment of Dynam Capital. Craig has a master’s degree in engineering from the University of York, UK, and an MBA with distinction from INSEAD, and is a member of the Singapore Institute of Directors.
Nothing in this article quoting Craig Martin is intended to be a recommendation.
*VietNam Holding is a client of Edison Investment Research.
