The country's demographics are second to none, portfolio founder Juerg Vontobel says, and with only one-third of formerly state-owned companies privatized so far it is only half-way through a liberalization process.
Vontobel points out that rising Chinese labor costs are pushing multi-nationals out of the world's second-largest economy and into neighbors such as Vietnam, which already houses a Foxconn plant.
"You can actually see the growth on the street. I lived there in the 90s and it was like Thailand in the 70s before everything took off," Vontobel said.
Fund chairperson Min-Hwa Hu Kupfer added: "Vietnam has two main advantages. Firstly it is a coastal country therefore there is no economic hinterland, meaning it doesn’t have the problems with economic stability of a country like China."
"Secondly, it has a young and extremely well-educated population, more educated than in China."
In recent years investors saving for a pension that is still a long way off have turned to frontier markets to provide them with a high-risk, high-return edge to their portfolio, and south-east Asian economies have given them what they want.
Every single FSA-recognized offshore single-country Thai and Indonesian fund has returned well over 100 per cent in the past three years, with Fidelity Indonesia gaining more than 500 per cent over a decade and Amundi Equity Thailand more than 490 per cent over the same period.
With many analysts warning that the value has gone from those two countries, however, many are tipping Vietnam to fill the void.
The price-to-earnings ratio in Vietnam is, at 11.45, lower than in Thailand, where it is 15.44, and Indonesia, where it is 19.26.
However, Vontobel says that a period of high inflation caused by a central bank pursuing a growth-at-all-costs strategy has put off many investors from the region.
"We do not have foreign investors showing the same interest as in the Indonesian or Thai markets," he explained.
However, a change of governor at the bank has led to an improvement in monetary policy.
"They have picked the right man so we are positive for the future," he added.
He says that foreign direct investment has so far been slow to pick up, but an increase in domestic investment could be the precursor.
Vontobel and Kupfer invest in two main themes: agriculture – the sector accounts for 20 per cent of GDP – and domestic consumption.
Data from FE Analytics shows Vietnam Holding is up 53.3 per cent over a three-year period, compared with 1.73 per cent from the MSCI Vietnam index.