Core Insights - Vietnam has been upgraded from frontier to emerging market status by FTSE, effective September 2026, following years of maturation in its market [1][2] Group 1: Impact of Vietnam's Upgrade - The upgrade will benefit existing Vietnam ETFs through price appreciation and potential net inflows [2] - Emerging market indexes and ETFs may include Vietnam, enhancing exposure to the country starting in 2026 [2] - Vietnam's economy may experience increased sentiment and exposure, particularly benefiting IPO activities in the equity market [2] Group 2: Understanding Frontier Markets - Frontier markets are classified by FTSE as less developed than emerging markets, with around 30 countries currently in this category [3] - These markets meet minimum investability and accessibility standards but lack the liquidity and pricing transparency of emerging markets [3] Group 3: ETF Landscape - U.S.-listed frontier ETFs have ceased to exist due to liquidity issues, with recent closures of Invesco's and BlackRock's frontier market ETFs [5] - Changes to FTSE indexes will allow Vietnam exposure in ETFs like the Vanguard FTSE Emerging Markets ETF (VWO) and Schwab Emerging Markets Equity ETF (SCHE) starting in September 2026 [6] Group 4: Performance of Vietnam ETFs - Following the upgrade announcement, Vietnam ETFs have seen price increases, with VNM up approximately 8% and VNAM up around 7% [8] - Year-to-date, Vietnam ETFs have risen about 70%, indicating strong market performance [9] Group 5: Investment Strategies - Investors may consider single-country ETFs like VNM and VNAM for targeted exposure to Vietnam, as allocations in broader emerging market ETFs are expected to be low [10] - The VanEck Vietnam ETF (VNM) has $609 million in assets, primarily focused on real estate and financials, while the Global X MSCI Vietnam ETF (VNAM) has around $25 million in assets with a similar sector focus [11]