The Economist has entitled a story about Vietnam as “A tiger at bay,” but perhaps a more thorough Vietnam investment review would have led to the title “Apocalypse Now” – especially since the Market Vectors Vietnam ETF (VNM) is the only easy way for American investors to invest in the country right now and that ETF contains a few (unwanted) surprises for risk adverse investors. More adventurous investors could invest in VinaCapital (VCVOF.PK), which manages the following three closed-end funds: The VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL) and Vietnam Infrastructure Limited (VNI). However, those Vietnam closed-end funds trade on the AIM Market of the London Stock Exchange which largely places them out of reach for most American investors trading with discount brokerage accounts.
So why could Vietnam be an “Apocalypse Now” for investors at this point in time? Let me first tell you about my experience living and working in Vietnam so that you can decide for yourself whether Vietnam is the best emerging market to invest in right now and then why Vietnam investments like the Market Vectors Vietnam ETF may not be your best emerging market ETF choice.