GLOBALIZATION IS IMPERIALI$M
Vanguard plans to channel about $2.5bn (VND65 trillion) into Vietnam through its investment portfolios over the coming year, VnEconomy reported on September 19. The money will be invested on behalf of millions of people worldwide, according to Duncan Burns, Head of Investment Management and Global Equity, Asia-Pacific at Vanguard Australia.
Burns was speaking at a conference in Hanoi on the evening of September 18 titled "Vietnam in the FTSE Russell Global Equity Index Series (FTSE GEIS)", held as the Southeast Asian country moves into the index provider's emerging market classification. Index inclusion typically draws passive money from funds that track global benchmarks, tying a market's fortunes more closely to international capital flows.
Burns said the upgrade was a crucial and highly promising milestone in the continued development of Vietnam's capital market, and marked the country's deeper integration into the international financial system.
Vanguard manages a substantial share of index assets tracking global emerging market equity benchmarks, giving the asset manager a detailed view of how the group of indices functions. Burns said the firm supports the transparent methodologies developed by the FTSE Russell team, and that Vietnam had earned its position after years of reform and development.
Improvements in market accessibility, transparency and market infrastructure have made Vietnam an increasingly attractive destination for investment, he said.
That matters because Vanguard is not a short-term trader, Burns said. The firm's index funds and exchange-traded funds are built around long-term investment, and Vanguard expects to hold its Vietnamese positions for decades, for as long as the country remains in the benchmark index.
Many of those investors may never have set foot in Vietnam, Burns said, but through globally diversified portfolios they will be able to take part in the country's sustainable growth.
He said he had spent a week in Vietnam and was most struck by the country's intense focus on the opportunities ahead. Inclusion in the index was not the final destination but the starting point for something much greater, he said.
Burns added that a place in major benchmark indices historically brings greater international visibility, wider investor participation, better access to capital and deeper integration into the global financial system.
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