What made the day valuable was hearing directly from the people who built the path to it. FTSE Russell walked through the criteria and the review process. The Vietnam Exchange and SGX filled in the years of market infrastructure work that made the classification possible in the first place — the settlement reforms, the pre-funding changes, the trading system upgrades. Reclassification tends to get reported as a moment. It is actually the visible end of a decade of unglamorous plumbing and policy work, most of which was never covered by anyone.

But the thing I keep coming back to from that trip is something else entirely, and it changed how I think about a story that hasn’t been sitting right with me. The prevailing narrative about Vietnam’s equity market is that foreign investors have been leaving. This is not wrong. The net selling figures are large and they are real — several billion dollars year to date, and a great deal more since early 2023. Every serious conversation I have about Vietnam’s capital markets includes some version of this point, usually as evidence that international appetite has cooled.

Matt Smith at Yuanta walked me through why that reading is incomplete.

Start with where the selling came from. Foreign institutions were net buyers in late 2022 and early 2023 — precisely when the market was in freefall, when forced selling from unmet margin calls was cascading through the system in the wake of the bond crisis. They bought the bottom. What has happened since is that they have been realizing those gains. That is not capital fleeing a market. That is a trade that worked, being closed.

Then look at what net flows actually measure. Net is total buying minus total selling. It tells you how positions changed. It tells you nothing about how active anyone is. And when you look at total participation — buying plus selling — foreign investors are more engaged in Vietnamese equities than they have ever been. Their share of cash equity turnover is above thirteen percent year to date, the highest since the 2017–18 period. Foreigners are buying more than they ever have. That fact is buried because they are also selling more than they ever have, and their sell orders are larger than their buy orders.

So the headline says exit. The turnover data says the opposite: deeper engagement, higher velocity, more institutions active in the market than at any point in its history.

Reclassification will make this harder to sustain. Index inclusion is mechanical — passive funds tracking the index have to buy, in size, on a defined schedule. Yuanta’s estimate puts the passive component in the low billions of dollars, concentrated in the middle portion of 2027, with additional active and quantitative flows on top of that. Whatever the precise figure turns out to be, a much wider group of institutional investors will be required to form a view on Vietnam than have ever had to before. Some will look at the net selling headline. The ones doing real work will look at the turnover.

This is where VIFC fits, and why I think the two stories belong together.

Reclassification and the financial center are not separate developments that happen to be occurring at the same time. They are the same phenomenon viewed from different angles: Vietnam’s financial architecture catching up to the size and complexity of its real economy. One is the public market side of that — international recognition that the exchange infrastructure now meets a global standard. The other is the institutional side — building the structures that let capital do more here than buy and sell listed shares.

Neither is sufficient alone. Index inclusion opens a channel, but a passive allocation to a basket of large-cap stocks is a narrow form of participation. What serious investors keep telling us they need is the layer underneath — fund structures they recognize, custody arrangements they can explain to an investment committee, hedging instruments that let them hold a position for ten years, exit routes that produce realized returns. That layer is what we are building, and it will take years rather than months.

The encouraging part is that both tracks are moving at once, and they reinforce each other. Reclassification brings attention and flows. The finance center gives that attention somewhere substantive to land. A country that had neither five years ago now has one in place and the other under construction.

I would rather be building the second one in a market that just achieved the first than the other way around.

— Rich McClellan
CEO, Vietnam International Financial Center (HCMC)

When I started talking publicly about VIFC a few years ago, most conversations began with skepticism. Not hostility — Vietnam’s fundamentals are too strong for that — but genuine doubt about whether this was real, whether the government could follow through, whether the legal architecture would actually materialize. I spent a lot of time explaining what an international financial center is and why Vietnam needs one.

Those conversations have changed. The question is no longer whether Vietnam can build the necessary frameworks. Most serious practitioners now accept that it can, and that substantial progress has already been made. The questions have become more specific, more practical: show me exactly how this works. Show me how capital gets in, how it gets deployed, how it gets out. Show me the structures I recognize, the custody arrangements I can explain to my investment committee, the exit pathways that let me report realized returns to my LPs.

That shift is the most encouraging signal I’ve encountered since taking this role. Questions at the level of “will this happen” are now relatively easy to answer. Questions at the level of “here’s precisely what I need before I can commit” are an invitation, signaling that the market believes in the vision and is preparing to participate.

The Vietnam Financial Forum crystallized this more than anything else. We brought together roughly fifty speakers across twelve sessions — international fund managers, development finance institutions, domestic asset managers, exchange operators, lawyers, bankers — without scripting what they would say. What struck me was the convergence. Practitioners addressing completely different topics, in separate sessions, without coordinating, arrived repeatedly at the same short list of priorities.

Currency convertibility and hedging came up first and most often. Not as an abstract concern but as a practical precondition: before a serious allocator commits to a ten-year position in any market, they need to know whether that exposure can be hedged over the life of the investment. Forwards, swaps, a functioning derivative ladder. Underlying all of it is a more fundamental question about currency convertibility — whether capital can move freely when it needs to. Without that, long-duration institutional capital stays on the sidelines regardless of how compelling the underlying opportunity is.

Market infrastructure came up just as consistently — what practitioners called the plumbing. Custody, clearing, settlement, fund administration, legal structures for holding and pooling capital. The warning one speaker offered was memorable: markets that focus on launching exchanges and listings while neglecting settlement, clearing, and secondary market depth join a long list of exchanges that did not endure. Build the foundations first.

Exit pathways came up on day two with equal force. Institutional investors are judged on realized rather than unrealized returns, and Vietnam's IPO market remains limited — active on the entry side, constrained at the exit. The private capital flywheel only turns when exits are predictable: completed exits attract fresh capital, which funds the next generation of companies, which deepens the market for the next round of exits. That cycle is currently stalled at the exit turn, and resolving it is the next frontier.

What gives these findings their weight is not that any one of them is surprising. It’s that they converged. Fifty practitioners from different corners of the market arrived independently at substantially the same agenda. That suggests these are real structural priorities, not the preferences of any one constituency — and that they are now well enough understood to be acted on.

The US trip confirmed the same picture from a different angle. I spent several days in New York meeting investors, banks, and professional services firms. The appetite for Vietnam is genuine and growing. What was different about these conversations compared to a year ago was the specificity. People are no not needing to be convinced to pay attention to Vietnam. They’re asking how to engage, what structures to use, which regulations to track, who to talk to. Meetings ended not with general expressions of interest but with offers of support — people volunteering their connections and expertise to help us build VIFC.

Global capital is paying attention to Vietnam in a way that it wasn’t two years ago. Part of that is the FTSE Russell emerging market reclassification coming in September, which will bring automatic passive inflows and force a much broader set of institutional investors to form a view. Part of it is Vietnam’s growth story, which continues to outperform. And part of it is that the VIFC framework has given international institutions something specific to engage with. Building a dedicated financial center with its own legal architecture, its own court and arbitration system, its own regulatory pathway, means we are beginning to answer the question “how do I structure this.” That answer isn’t complete yet, but we’re getting there.

The through-line from Danang to New York is this: the market understands what Vietnam is building, broadly agrees on what the foundations need to be, and is ready to engage seriously when those foundations are in place. The work now is to build them — in the right order, carefully, without getting distracted by the volume of interest.

I came back from this trip more energized than I left, and also more clear-eyed about what the next phase requires. Less promotion, more execution. Fewer conversations about the vision, more conversations about the specific transactions and structures that will prove the model works. The market is telling us what it needs. The job now is to deliver it.

— Rich McClellan
CEO, Vietnam International Financial Center (HCMC)

It’s a fair observation. We’ve been deliberately ambitious in how we’ve communicated the long-term vision — a financial center spanning two cities, serving as a platform for Vietnam’s next phase of economic development, connecting the country to global capital at scale; with a wide range of thematic areas we expect to build out over time. That vision hasn’t changed. But vision and sequencing are different things, and I think it’s worth sharing some of the thinking behind how sequencing decisions are likely to take shape — with the caveat that final calls on regulatory priority sit with the relevant authorities, not with me.

Internally, we’ve been evaluating near-term product priorities against four criteria. The first is immediate and obvious supply and demand. Is there a real market for this right now — not in three years, but today? Are there identifiable institutions on both sides of the transaction, ready to move?

The second is alignment with Vietnam’s development trajectory. Does this product serve what Vietnam actually needs — infrastructure capital, energy transition financing, deeper capital markets? An IFC isn’t useful for its own sake. It matters because Vietnam needs an enormous amount of capital to complete its development journey, and the existing financial architecture has limits on what it can deliver alone.

The third is political will. Financial center products don’t just need regulations — they need champions across government. Is there genuine momentum behind this at the national level?

The fourth is regulatory and supervisory lift. How much new regulatory infrastructure does this require, and how long would it realistically take to get right? This is the most honest of the four. VIFC is a young institution with a small team. It’s not realistic to stand up twenty regulatory frameworks simultaneously and do any of them well.

Looking at the landscape through that lens, three areas stand out as likely near-term focal points.

Investment funds and asset management is the most immediately pressing. The demand is real and named. A meaningful pipeline of international asset managers — infrastructure funds, private equity, climate-aligned funds — is watching closely and waiting for the enabling framework to be finalized. The capital thesis is straightforward: Vietnam needs roughly $1.5 trillion in infrastructure investment over the coming decades, and domestic banks cannot provide all of it. International fund managers can help close that gap, but largely through structures — funds, REITs, private credit vehicles — that don’t yet have a clear home here.

Green bonds and sustainable debt is another. The global green bond market exceeds a trillion dollars annually, and international institutional investors — pension funds, sovereign wealth funds, development finance institutions — have explicit mandates to deploy capital into sustainable instruments in emerging markets. Vietnam has a large and growing pipeline of infrastructure projects that are bankable as green assets. Work is already underway, with international technical assistance, on the regulatory architecture that would support this.

Agricultural commodity benchmarking is the third. Vietnam is a top-five global exporter of coffee, rice, rubber, and cashews, yet international commodity traders and banks currently price off fragmented local sources. There’s genuine commercial appetite — from producers and trading firms alike — for a credible, Vietnam-based benchmark. Usefully, the first phase of this doesn’t require a financial services license at all; it’s a data and market information service that could begin to take shape relatively soon, with capital mobilization work — trade finance, risk instruments — following in later phases.

How any new financial center brings institutions in matters as much as what it offers them, and this is something I think about constantly.

Looking at international financial centers that built lasting credibility versus ones that struggled in the early years, one critical key was discipline in how they opened. The centers that got it right spent their early months working quietly with a small group of carefully selected anchor institutions. They used that period to run their processes for the first time, find problems, fix them, and build confidence before opening more broadly. They avoided grand public announcements until they had real members and real transactions to point to.

The ones that struggled made large public announcements before their systems were ready, attracted companies chasing tax benefits rather than genuine market participation, and spent years managing the gap between what was promised and what was actually available.

The path I hope to follow will not yield the most members in year one, but the right ones. A small number of serious institutions with real transactions at scale does more for credibility than a large number of registered companies chasing incentives.

I like to think of the early movers as pathfinders, because the ask of them is a little different from a normal membership. These institutions will help us prove (improve) the model, surface where processes need improvement, and show the broader market that serious capital can move through VIFC. There’s already real interest from candidates in active dialogue, and as the relevant regulatory frameworks come into force, I’d expect institutions to be brought in carefully, one at a time.

What I ask of everyone watching this process, and what I hear myself saying most days, is patience. The early experience won’t be as smooth as it will be in a year or two. Some things will take longer than people might expect. We’ll learn as we go, and adjust as needed. But the institutions that engage early are doing something valuable — for themselves, and for the market that follows them.

— Rich McClellan
CEO, Vietnam International Financial Center (HCMC)

I did not expect to be writing to you today in this capacity.

Those same finance leaders, by the way, are now requesting my time. I wouldn’t say they’re all fully converted. But they’ve gone from deeply skeptical to genuinely curious, and to me that’s a remarkable shift — one that says something about how far this has come.

The journey between that first assignment and this moment is worth telling, because it explains both what VIFC is and how I think about it. For the first two years the work was mostly conceptual — taking ministers on study tours to Dubai, Singapore, and London, writing best practice papers, mapping design choices, trying to figure out what model might actually work for Vietnam’s specific context. It felt important but uncertain. The kind of work where you never quite know if anyone is listening.

Then in the latter part of 2024 the Politburo issued a decision that was almost entirely aligned with what we had been recommending. That was the first moment I thought: this might actually happen. In June last year, the National Assembly passed Resolution 222, the legislative foundation. In December, eight implementing decrees were finalized and launched in a single day. That same day, the Party Chairman of Ho Chi Minh City pulled me aside and asked me to serve as his founding CEO.

I have been in the role five months now.

It is a strange and energizing place to be. We have all the chaos, urgency, and improvisational energy of a startup — and all the controls, protocols, and institutional gravity of a government agency. A team of roughly 25 people, many coming from government or academia rather than the private sector. A level of ambition that spans sectors, asset classes, and hundreds of billions of dollars in potential capital flows. And at the moment, no licensed institutions, no processed business registrations, and a stack of regulations still being finalized. Everyone is working hard. Nobody is under any illusion that the hard part is behind us.

The most common question I get — from investors across Asia, Europe, and the US — is: when can I come in? I get it several times a day. The honest answer is: we’re working on it, and I think it will be worth the wait. But I want to be clear about what “working on it” actually means, because the gap between what people imagine is happening and what is actually happening is one of the more interesting stories in Southeast Asian finance right now.

Think of it like a restaurant in the weeks before opening. The kitchen is being built. The team is being hired. The menu is being tested. You can see the lights on inside and sense that something real is coming — but the doors aren’t open yet, and they shouldn’t be until we can begin to deliver on the promise.

Here is how I think about where we are. 2025 was the year the legal architecture got built — Resolution 222, the decrees, the foundational framework. But legal readiness does not mean operational readiness. A financial center is not open because a law says it is. It is open when institutions are licensed, capital can move, disputes can be resolved, talent is in place, and investors have enough confidence in the machinery to begin using it.

2026 is the year we build that machinery. 2027 is when I expect the first real market activity to begin — licensed institutions doing the things an international financial center exists to do.

That is a ten-year project with a meaningful first chapter available in about eighteen months. I say that not to lower expectations but because I have studied enough of these projects around the world to know that the ones that overclaim early lose credibility. The value proposition of VIFC is Vietnam itself — not a tax haven, not a competitor to Singapore or Dubai, but a platform designed to make it dramatically easier for global capital to find its way into one of the world’s most compelling growth stories. Getting that right is worth doing carefully.

I am starting this newsletter because I talk to a great many people across a great many contexts and I want an open channel where I can share what I am seeing — what is moving, what is hard, what is coming. Not press releases. Not major announcements. Just a periodic note from inside the build, for people who are already paying attention and want to understand what is actually happening here.

If that sounds worth reading, I am glad you are here. If you know someone else who should be in this conversation, I would be grateful if you passed it along.

— Rich McClellan
CEO, Vietnam International Financial Center (HCMC)