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Investing in Vietnam through ETF pros and cons

Once a person has decided to invest in Vietnamese stocks, the next step is to find out how to do that and one of the first thing many people think about is to invest in Vietnam through an etf. Using an etf to invest in a specific market is usually quite a good idea and is becoming more and more popular for investors with little experience and knowledge. With an etf you do not have to worry about the selection of stocks since this is already done for you.

There is an associated cost of course for this service but it is often quite reasonable.

However, etf especially in the case of markets such as Vietnam have limitations. First, you need to know one thing: there is no pure Vietnamese etf at the time being. You can try to find one but you will not succeed.

A couple of etf can offer you exposure to the Vietnamese stock market but their exposure to Vietnam is most of the time limited to 10-20% at the max. The remaining 80-90% exposes you to other Asian stock markets, which could include developed markets like Japan or South Korea.

Even though we are not saying here that this is necessarily bad to have exposure to Japanese or South Korean stocks, we can argue that this is obviously an absolute different type of investment (with less risks but also far less gain potential) than investing in Vietnamese stocks.

The best way to invest in Vietnam is definitely by opening a stock brokerage account in Vietnam, which is a process relatively cheap and simple that allows you access to almost all Vietnamese stocks.

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