Hanoi (VNA) – Diversifying products can help Vietnam’s stock market better meet investment needs and risk management requirements.

Alongside a stronger legal framework, adequate liquidity, effective distribution channels and improved investor knowledge are essential to ensuring that new products attract participants and operate efficiently.

Developing products to meet market demand

As the stock market enters a new development phase, expanding its range of products and services has become increasingly important. New offerings should respond to actual market demand while ensuring the conditions necessary for their effective operation.

Nguyen Minh Hoang, Analysis Director at Nhat Viet Securities Joint Stock Company (VFS), said exchange-traded funds (ETFs) should be prioritised because they offer individual investors a simple, accessible and low-cost way to participate in the market and reduce exposure to fluctuations in individual stocks.

ETF trading currently accounts for just 1–2% of Vietnam’s total market trading value, compared with 20–30% in the Republic of Korea, around 28% in the US and 11% in Europe, he noted. The draft amended Securities Law will broaden the range of assets eligible for ETF formation, potentially paving the way for new products such as gold ETFs.

Hoang also highlighted the need to develop risk-hedging instruments as foreign index-tracking investment flows increase following Vietnam’s stock market upgrade.

Real estate investment trusts (REITs) represent another promising product, offering individuals a liquid channel for property investment while helping real estate businesses restructure their assets. Their development requires appropriate tax policies, clear rules on asset valuation and transfers into funds, and income-generating properties such as offices, warehouses and industrial parks.

Nguyen Thi Bich Nga, deputy head of the State Securities Commission’s Department for Fund Management Companies and Securities Investment Funds Regulation, said the management agency is refining the legal framework to diversify products and expand the number of investment funds; and is amending the Securities Law to introduce an ETF definition allowing funds to be formed from other assets.

Amendments are being made to relevant legislation and guiding regulations to simplify administrative procedures and enable online processing, creating more favourable conditions for fund development.

Building conditions for effective implementation

The draft Law on amendments and supplements to several articles of the Securities Law also propose a controlled testing mechanism, or regulatory sandbox, for new technologies, products, services and business models within defined limits on scope, participants, location and duration. Such trials could help assess market demand, operational feasibility and potential risks before wider deployment.

Hoang said the mechanism will help bring new products to market safely. Success will also depend on strong market makers to ensure initial liquidity, broad distribution through banks and digital platforms, and tax policies encouraging long-term investment.

He proposed distributing fund certificates through banks, e-wallets and financial applications, supported by simplified electronic identification and regular investment plans. Preferential tax policies for fund investments and long-term holdings, particularly voluntary retirement accounts, can further encourage participation.

Nga said the Ministry of Finance’s Circular No. 136/2025/TT-BTC has clarified online distribution of fund certificates, making them more accessible to investors nationwide. Regulators will strengthen supervision of these activities and continue investor education and encouraging participation through securities investment funds./.