Standard & Poor's has launched the S&P Vietnam 10 Index, covering the largest and most liquid companies in Vietnam.

The index adds to S&P's existing set of Asian equity indexes targeting some of the biggest names and biggest markets. S&P offers an index on the 50 largest stocks on the National Stock Exchange of India, the S&P NCX Nifty; the S&P HKex LargeCap, which targets the 25 largest Hong Kong-traded stocks; and indexes for Chinese stocks based outside mainland China through its S&P/CITIC China 30 and S&P/CITIC China 50 indexes.

Vietnam has previously only been covered by S&P in broad-based Asia indexes. FTSE already offers two indexes covering stocks that trade on the Ho Chi Minh Stock Exchange; the FTSE Vietnam All-Share Index, covering 90% of the stock universe; and the more narrow FTSE Vietnam Index.

The top five holdings in the S&P Vietnam 10 Index are FPT Corp., Petroleum Technical Services Corporation, PetroVietnam Drilling & Well, PetroVietnam Fertilizer and Chemicals, and PetroVietnam Insurance JSC. Sectors covered include Consumer Discretionary, Energy, Financials, Industrials, Information Technology, Materials and Utilities. 

Companies to be included in the index must have a float-adjusted market capitalization above $50 million and a three-month average daily trading value above $250,000, and must trade on local Vietnam exchanges.  Weights are liquidity-based, with no single stock having a weight of more than 15% in the index at reconstitution. The index will be rebalanced quarterly. 

S&P has launched similar 10-stock indexes covering China and India's markets as well.

Vietnam is currently classified as a frontier market by the major index providers, and it has garnered a lot of attention from investors seeking to diversify their portfolios and take advantage of the outsized returns the country's market has achieved in recent years - although it is down sharply year-to-date. However, many believe that Vietnam represents a compelling long-term story.

There is a Vietnam index-based ETF trading overseas, offered by Deutsche Bank's x-trackers family, the DB FTSE Vietnam ETF (LSE: XFVT) tracking an index provided by FTSE. In the U.S. EFT market, the Market Vectors family recently filed for a Vietnam fund.