Foreign Funds Sell $592M in March, VIC, VHM, FPT Under Pressure

Overview

Lumen Vietnam Fund (LVF) reported a -6.52% USD return for March 2026, underperforming the Vietnam All Share Index (VNAS), which fell -10.21% for the month. The fund cited market volatility driven by rising interbank interest rates to 10.4% per annum and geopolitical tensions, particularly concerns over energy supply disruptions in the Strait of Hormuz. Foreign investors were net sellers of $592 million during the month, with selling pressure concentrated on large-cap stocks like Vingroup (VIC), Vinhomes (VHM), and FPT Corporation (FPT).

Key Facts

• Lumen Vietnam Fund reported a -6.52% USD return for March 2026, bringing its year-to-date USD return to +4.97%.
• The Vietnam All Share Index (VNAS) fell -10.21% in March and -7.83% year-to-date, both in USD terms.
• Foreign investors were net sellers of $592 million in March, with selling focused on large caps VIC, VHM, and FPT.
• Interbank interest rates surged to 10.4% per annum in March, increasing capital costs and cooling the real estate sector.
• The fund restructured its portfolio towards more defensive sectors like energy and consumer staples, while increasing its cash allocation.
• Domestic investors accounted for nearly 87% of total trading value, acting as a market pillar.
• The Purchasing Managers’ Index (PMI) rose to 54.3, indicating robust economic health.

What Happened

According to its March performance report, Lumen Vietnam Fund experienced significant volatility, recovering from a sharp early-month decline to end with a -6.52% USD loss. The fund stated that market dynamics reflected a shift from strong distribution to a more cautious phase, with initial selling pressure pushing daily trading value to a high of 1.414 million USD before cooling to around 710 million USD by month-end. This adjustment period allowed for clearer assessment of sector rotation trends.

The fund identified dual pressures from the Iran conflict—especially worries about energy supply disruptions in the Strait of Hormuz—and the spike in interbank interest rates as key drivers of price fluctuations. The increased cost of capital particularly dampened the real estate sector, with Vingroup-related stocks like VIC and VHM facing notable selling pressure. While energy and utilities initially showed resilience due to supply concerns, they eventually followed the broader market trend.

Market Context

Vingroup (VIC) is listed on the Ho Chi Minh City Stock Exchange (HOSE). As of April 15, 2026, VIC closed at VND 174, up 5.38% on volume of 3.96 million shares, while VHM closed at VND 132, up 2.48% on volume of 3.52 million shares, and FPT closed at VND 75, down 1.05% on volume of 6.84 million shares. These recent gains follow the March sell-off highlighted in the report, suggesting potential market stabilization or bargain-hunting. The broader Vietnamese market remains sensitive to interest rate movements and foreign capital flows, as evidenced by the $592 million net foreign outflow in March.

Strategic Significance

The fund’s portfolio shift towards defensive sectors and increased cash holdings signals a risk-off approach amid heightened volatility. For long-term investors in stocks like VIC, this underscores the sensitivity of capital-intensive sectors like real estate to interest rate hikes. The sustained role of domestic investors, accounting for 87% of trading value, may provide a buffer against foreign outflows, but the concentration of selling in large caps like VIC, VHM, and FPT could pressure valuations if outflows persist. The fund views the current market uncertainty as an attractive deployment opportunity, betting on Vietnam’s long-term growth story driven by public investment and industrial momentum.

What to Watch

• Q2 2026 earnings releases for VIC, VHM, and FPT to assess the impact of higher interest rates on profitability.
• State Bank of Vietnam (SBV) policy meetings and interest rate decisions in response to inflation and growth targets.
• Foreign ownership filings and net flow data for April 2026 to see if the $592 million net selling trend continues.
• Updates on geopolitical developments, particularly in the Middle East, affecting global energy supplies and market sentiment.
• Progress on infrastructure projects like metro lines in Ho Chi Minh City, which the fund cites as supportive of long-term growth.