New research from Pureprofile, the global data and insights company, reveals that wealth managers and financial advisers expect clients to increase allocations to emerging and frontier markets over the next 18 months.
The research, which was commissioned by Vietnam Enterprise Investments Limited (VEIL), a Vietnam-focused investment company incorporated in 1995 with total NAV of £1.7bn(2), reveals that 64% of wealth managers and financial advisers surveyed expect clients to increase their allocations to emerging and frontier markets by between 10% and 15% over the next 18 months. Two thirds of wealth managers and financial advisers surveyed believe clients are currently underweight in emerging markets.
Over the next five years, 92% of wealth managers and financial advisers surveyed expect growth in emerging and frontier markets will outpace growth in developed markets.
In terms of why wealth managers and financial advisers believe emerging and frontier markets are attractive for investors, a growing middle class in these countries is seen as the biggest attraction. This is followed by the view that many emerging and frontier markets are seen as undervalued, followed by the belief that they are set to benefit greatly from the technological revolution – in many cases they will benefit more from this than developed markets. Other reasons for finding emerging and frontier markets attractive include growing stability in some of these, and the fact that some are attracting large quantities of foreign direct investment (FDI).
When it comes to frontier equity markets, nearly all of the wealth managers and financial advisers surveyed (99%) agree that they are an ideal environment for active fund managers to outperform because company disclosures in these markets are more limited, and analyst coverage is much lower than is typical in either developed or emerging markets. This can provide opportunities for well-resourced active managers focused on fundamental research to add value.
By the end of 2025, 93% of wealth managers and financial advisers surveyed expect their clients to be overweight in emerging markets.
Mr Tuan Le, Lead Portfolio Manager of VEIL, said: “Many emerging and frontier markets are dynamic and enjoying rapid positive change and growth. This represents an exciting opportunity for active investors, and our research shows that many wealth managers and IFAs expect clients to increase their exposure to these markets.”
Strong signs of economic recovery in Vietnam and future growth
Vietnam is showing strong signs of recovery with the trade surplus hitting the highest level in four years – with exports up 14.5% year-on-year and imports up 12.4% year-on-year. There has also been a recovery in industrial production and retail sales have grown 7.9% year-on-year. This, coupled with disbursed foreign direct investments reaching the highest level since 2012, have resulted in a stronger than expected first half of the year.
Collectively this has led to the Prime Minister assigning a budget revenue target for 2024 to exceed 10%. The Prime Minister has also urged to increase the progress of public investment disbursement to achieve the 95% 2024 target to support further economic growth.
Vietnam Enterprise Investments Limited (VEIL) is a closed-end fund, trading on the Main Market of the London Stock Exchange.
Launched in 1995, VEIL is the longest running fund focused on Vietnam and one of the largest which invests primarily in listed and pre-IPO companies in Vietnam that offer attractive growth and value metrics, and strong corporate governance.
