Illustrations by Nilaksiya Thiruchelvam
As with any investment, your capital is at risk.
In a decade of investing in Vietnam, I’ve seen the country of 100 million people become one of the best of all emerging-market export-growth stories. Foreign manufacturers thronged, supply chains deepened, and ports thrived. All this despite recent trade wars and geopolitical tensions.
What was missing was strong domestic growth. The ‘blazing furnace’ anti-corruption drive, which began in 2013, brought discipline but froze decision-making. The property market stalled, pressure built in the banking system, and a small bond crisis followed. Factories kept running for global customers such as Samsung and Nike. But Vietnam faced the dreaded ‘middle-income trap’ – failing to compete on wages without moving up the value chain.
Positive picture
I see exciting signs it can spring free. The new leader, To Lam, is the antithesis of his predecessor. His unprecedented reforms emphasise momentum, not enforcement. Annual GDP growth is already 8 per cent – Lam is targeting 10 per cent. He’s restoring confidence, unblocking investment and allowing the private sector to do what it does best: grow.
Meanwhile, index provider FTSE Russell is upgrading Vietnam from a ‘frontier’ to an ‘emerging’ market, potentially attracting billions of dollars in new investment.
We back companies, not countries. Eight of our largest Vietnam-based holdings – from plastic pipe makers to commercial banks and supermarkets – are all modestly valued compared to earnings.
As reforms channel more credit to the private sector, these firms should benefit from accelerated domestic investment and growing consumer demand.
Risk factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
This communication was produced and approved in March 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
Potential for profit and loss
All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.
All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.
The images used in this communication are for illustrative purposes only.
191813 10061948
