Cavendish has maintained its Buy rating on Vietnam Holding (VNH) , arguing that the investment company could benefit as Vietnam’s stock market broadens following its upgrade to FTSE Russell Secondary Emerging Market status.

Vietnam Holding’s net asset value (NAV) rose 4.5% in the year to 30 June 2026, compared with a 32.4% rise in the Vietnam All Share Index. However, Cavendish highlighted that the index rally was unusually concentrated, with Vingroup rising 357% and accounting for around 19.3% of the VN Index by year end. Vietnam Holding does not own Vingroup.

The broker said the fund manager had deliberately avoided increasing exposure to the Vingroup group because of concerns around valuations, loss making affiliates, intra group financing and guarantees. Instead, the portfolio remains focused on companies with strong balance sheets, quality earnings and attractive valuations.

Cavendish believes this approach could become more favourable if market leadership broadens. Vietnam’s reclassification to Secondary Emerging Market status took effect on 21 September, with estimates suggesting the change could attract US$5-10 billion of foreign capital from passive and active funds.

The portfolio continues to focus on domestic consumption, urbanisation and industrialisation, with its top 10 holdings representing 67% of NAV at the end of August. The largest holdings included Mobile World Corp, MB Bank and Hoa Phat Group.

Cavendish also pointed to the portfolio’s valuation. At the financial year end it traded on around 10x forecast 2026 earnings, compared with ~13x for the VN Index, despite strong expected earnings growth. The latest NAV stood at 372.8p against a share price of 337p, representing a 10% discount.

Vietnam’s economic backdrop also remains supportive, with GDP growing 8.2% year on year in the second quarter of 2026, while registered foreign direct investment reached US$34.7 billion in the first half, up 61% year on year.

View from Vox

Vietnam Holding’s portfolio remains positioned around strong earnings growth and attractive valuations, while Vietnam’s FTSE upgrade could help bring renewed foreign inflows and broader market participation. A wider rally beyond a small group of index heavyweights would create a more supportive backdrop for the fund’s disciplined investment approach.