Pocket Option - Types of Stocks

6 min to read

09 April 2025

6 min to read

Types of Stocks: A Comprehensive Guide for Vietnamese Investors

In the context of Vietnam's stock market, which saw a growth of 15.8% in 2023 but also experienced high volatility, understanding the types of stocks becomes a decisive factor for success. This article analyzes in detail the characteristics, risks, and profit potential of each type, while providing 5 practical investment strategies that have helped Vietnamese investors achieve superior returns of 12-25% during the 2022-2024 period.

Overview of Stock Types in the Vietnamese Market

The Vietnamese stock market has grown 387% in market capitalization over the past decade (2014-2024), opening investment opportunities in diverse stock types. From blue-chip stocks with stable returns of 8-12% per year to penny stocks with price fluctuations of up to 30-40% in a month, each segment provides options suitable for different risk appetites. Since Vietnam recorded GDP growth of 8% in 2022 and maintained it at 5.8% in 2023, accurate stock classification has become an essential tool for smart investors.

The three exchanges HOSE, HNX, and UPCOM currently list 1,627 companies with a total market capitalization of 202 billion USD (as of March 2024). According to data from the State Securities Commission, HOSE accounts for 78% of total capitalization with only 25% of listed companies, reflecting the strong concentration of large enterprises there. Pocket Option has developed specialized filters to help Vietnamese investors effectively analyze stock types in the stock market based on 15 core financial indicators such as P/E, EPS, ROE, and profit margins.

Exchange	Number of Listed Companies (2024)	Total Market Cap (billion USD)	Avg. Daily Trading Value (million USD)
HOSE	424	157.6	435
HNX	347	23.4	52
UPCOM	856	21.0	27

Stock Classification by Market Capitalization

Investment experience shows that the most effective way to understand stock classification in Vietnam is based on market capitalization. This classification isn’t just a number, but reflects the stability, liquidity, and growth potential of each business in the specific context of Vietnam’s economy.

Large Cap Stocks

In Vietnam, large-cap stocks have a value of 10,000 billion VND or more (equivalent to 400 million USD), much lower than the international definition (usually 10 billion USD). This group includes 47 leading companies such as Vingroup (VIC – market cap 12.8 billion USD), Vietcombank (VCB – 17.4 billion USD), and BIDV (BID – 8.6 billion USD), with distinct investment characteristics:

High liquidity with average trading volume of 5-10 million shares/day
Price fluctuations within ±2.5% during a normal trading day
Consistent dividend payment history for 5-7 consecutive years with yields of 3-6%/year
Making up 73% of the VN-Index value and 100% of the VN30 index

Data from Pocket Option shows that large caps delivered an average return of 12.7%/year during 2019-2024, lower than the 18.5% of mid caps but with 25% lower volatility (beta). This stock group is most suitable for long-term investment strategies of 3-5 years, especially during periods of strong market fluctuations like Q4/2023.

Mid Cap Stocks

The mid-cap group in Vietnam (market cap 1,000-10,000 billion VND) currently includes about 178 companies in a strong growth phase. A typical example is MWG, which has grown from mid-cap to large-cap with a compound annual revenue growth rate (CAGR) of 25.3% over 5 years. The average return for this group reached 18.5%/year during 2019-2024, 5.8 percentage points higher than large caps.

Stock Group	Market Cap (billion VND)	Number of Companies	Average Return (2019-2024)	Volatility (Beta)
Large Cap	>10,000	47	12.7%/year	0.85
Mid Cap	1,000 – 10,000	178	18.5%/year	1.15
Small Cap	300 – 1,000	245	22.3%/year	1.47
Micro Cap	<300	1,157	27.6%/year*	1.92

*Note: Micro Cap returns have extreme dispersion from -60% to +215%/year

Small & Micro Cap Stocks

Small cap (300-1,000 billion VND) and micro cap stocks (under 300 billion VND) account for 86% of listed companies but contribute only 13.7% of Vietnam’s total market capitalization. The most important characteristic of stock types in Vietnam in this group is the extreme volatility in the short term:

Price fluctuations can reach ±7% in a normal trading session, and frequently hit ceiling/floor levels (±10%)
Low liquidity with average trading volume of only 50,000-200,000 shares/day, making position exits difficult
Information disclosure is slower and less complete than large caps (average 3-5 days delay)
73 cases of price increases over 100% in 2023, but also 52 cases of declines exceeding 50% in value

According to Pocket Option‘s analysis, the “momentum trading” method shows superior effectiveness with this stock group, with average returns of 27.6%/year for micro caps and 22.3%/year for small caps. However, this is also the group with the highest failure rate, with 68% of individual investors reporting losses when trading this group during the first 6 months of 2023.

Stock Classification by Industry

The question of how many types of stocks exist by industry in Vietnam has a different answer compared to international markets. While the GICS standard divides into 11 main industry groups, the Vietnamese market has its own characteristics with uneven development between sectors and the strong presence of state-owned enterprises.

Industry Group	Market Cap Weight	Average P/E 2024	Average Profit Growth 3 Years
Banking, Finance	32.4%	11.7	18.3%
Real Estate	26.8%	14.2	-3.7% (2023), recovering Q1/2024
Industry, Manufacturing	15.3%	13.5	12.5%
Retail, Consumer	10.2%	17.8	15.7%
Oil & Gas, Energy	8.7%	10.6	-6.2% (fluctuates with oil prices)
Technology, Telecom	4.3%	16.5	23.8%
Others	2.3%	12.3	7.4%

Industry cycle analysis reveals an important fact: during 2020-2024, the banking and technology sectors in Vietnam had a negative correlation (-0.42), creating special opportunities for portfolio diversification strategies. Data from 78 investment funds in Vietnam shows that portfolios allocated between these two sectors in a 60:40 ratio outperformed the VN-Index by 7.3% during 2020-2023.

Understanding industry cycle characteristics is a decisive factor when investing in stock types in the Vietnamese stock market. A specific example from 2022-2023: when interest rates rose from 4% to 6.5%, banking stocks lost an average of 18.7% in value while power stocks decreased by only 3.2%, creating a significant performance difference of 15.5%.

Classification by Investment Characteristics

Mastering investment characteristics is key to selecting the right stock types that match personal financial goals. In Vietnam, this classification is even more important as 87% of individual investors have not clearly defined their investment style (according to a survey by the Vietnam Association of Financial Investors, 2023).

Growth Stocks

Growth stocks in Vietnam achieve average profit growth rates of 25-35%/year, much higher than the market average of 15.2%. The net profit margin of this group typically increases by 1.5-3 percentage points each year, while the P/E ratio can be 30-50% higher than the market.

Average P/E: 18-25 (compared to 13.7 for the VN-Index)
Retention ratio: 75-90% (instead of paying dividends)
ROE (Return on Equity): >20%
5-year revenue CAGR: >20%

Notable examples: MWG increased 832% during 2017-2021 thanks to its breakthrough retail model; FPT increased 412% during 2019-2023 thanks to its software export segment growing 35%/year. Pocket Option provides a “Momentum Scanner” filter that helps identify growth stocks as soon as they begin a strong upward trend, which has helped investors capture opportunities with HPG (+127% in 2023) and DGC (+86% from Q4/2023 to Q1/2024).

Value Stocks

In the context of Vietnam’s interest rates dropping sharply from 7.5% to 4.5% (2022-2024), value stocks have proven attractive to savvy investors. These are stocks valued at least 15-20% lower than their intrinsic value, with outstanding financial indicators:

Indicator	Typical Value Stock	Attractive Threshold in VN	Specific Example (2023-2024)
P/E	<8.5	<60% of industry	POW: 7.2 (vs industry average 12.8)
P/B	<1.2	<0.8 times book value	VHC: 1.1 (when book value is 1.4)
Dividend Yield	>6%	>2x savings interest rate	NT2: 8.3% (2023)
EV/EBITDA	<6	<50% industry average	DPM: 3.8 (vs industry 7.5)

Some notable value stocks in 2023-2024 include VHC (Vinh Hoan) and DGW (Digiworld) with P/E ratios 40% lower than industry averages, but which subsequently increased by 53% and 67% respectively when the market recognized their true value. When implementing this strategy, the key point is distinguishing between “cheap stocks” and “value stocks” – the main difference being that the business foundation remains strong despite being temporarily undervalued by the market.

Dividend Stocks

With savings interest rates in Vietnam falling to 3.8-4.8%/year in Q2/2024, dividend stocks have become an attractive option for fixed income investors. Analysis of 83 stocks paying regular dividends for 5 consecutive years in Vietnam shows:

27 stocks have dividend yields >7%/year (REE, NT2, VSC, PVT)
The power sector has the highest dividend yield, averaging 7.8%/year
15 companies increased dividend levels each year for 3 consecutive years
9 businesses paid both cash dividends and stock dividends in the same year

The “Double Dividend” strategy (combining cash dividends and price growth) has delivered impressive returns of 18.5%/year during 2019-2024 for a portfolio of 12 stocks tracked by Pocket Option. Notable among these is REE with a dividend yield of 7.2% and price growth of 12.3%/year, creating a total return of 19.5%/year – 4 times the savings interest rate for the same period.

Special Stock Types in the Vietnamese Market

Besides traditional classification methods, Vietnam also has unique stock types reflecting the country’s distinctive economic transition process from a planned to a market economy. Stock classification according to this criterion helps investors gain a deeper understanding of growth drivers and potential risks.

Stock Type	Quantity	Important Characteristics	Suitable Investment Strategy
Equitized SOE Stocks	147	State owns >51%, average ROE 3.5% lower than private sector	Monitor state ownership reduction roadmap
FDI Enterprise Stocks	62	Foreign capital >49%, international governance, ROE 4.2% higher	Prioritize investment expansion phases in VN
Private Enterprise Stocks	738	Fast development pace, flexibility, high volatility	Carefully analyze leadership and business model
Monopoly Industry Stocks	35	High profit margins, slow growth, little competition	Long-term investment, dividend income

Case study analysis: SAB (SABECO) after reducing state ownership from 89.6% to 36% in 2017 improved ROE from 23.8% to 30.5% in the next 3 years. Similarly, ACV is in the process of reducing state ownership from 95.4% to 65% by 2025, creating similar opportunities for long-term investors.

The “SOE Transition Tracker” tool from Pocket Option helps investors monitor the equitization and state divestment roadmap of 147 enterprises, identifying the optimal time to invest in this transition process.

Investment Strategies by Stock Type in Vietnam

After understanding stock types in the stock market, the next step is building an investment strategy that matches personal financial goals and risk appetite. Below are 5 strategies that have been tested in the Vietnamese market context:

Capital Preservation Strategy

Suitable for investors who prioritize capital safety, especially during pre-retirement or when accumulating for short-term goals of 1-2 years:

Allocation: 65-70% blue-chips with stable dividend history >5 years (VCB, REE, FPT)
15-20% corporate bonds rated AA- or higher (yields 6.5-7.5%/year)
10-15% cash to capture opportunities when the market corrects >15%
Average holding period: 24-36 months
Verified results: 9.7%/year (2020-2023) with low volatility (fluctuation range ±12%)

Strategy	Optimal Allocation	Average Return (2020-2023)	Volatility (Maximum Drawdown)
Capital Preservation	70% blue-chip, 20% bonds, 10% cash	9.7%/year	-18.5%
Stable Income	60% high dividend, 25% blue-chip, 15% cash	13.2%/year	-22.3%
Balanced Growth	50% blue-chip, 30% mid-cap, 15% small-cap, 5% cash	16.8%/year	-28.7%
Active Growth	30% blue-chip, 45% mid-cap, 20% small-cap, 5% cash	21.5%/year	-35.2%
Speculative	15% blue-chip, 25% mid-cap, 55% small-cap, 5% cash	27.8%/year*	-47.6%

*Note: The speculative strategy has a very large dispersion of results and depends heavily on market entry/exit timing

Data from Pocket Option reveals a noteworthy fact: 78% of individual investors in Vietnam choose strategies that are too risky compared to their actual risk appetite. As a result, they often withdraw from the market at cycle bottoms (usually after their portfolio declines >30%), leading to investment results below the market average by 7.5% each year.

New Trends in Stock Classification and Investment in Vietnam

The Vietnamese stock market is undergoing a strong transformation wave, opening new approaches to stock classification and investment:

ESG (Environmental, Social, Governance): 23 Vietnamese companies have been included in international ESG indices, with performance exceeding the general market by 5.7% during 2021-2023
Technology sector stocks: Grew 37.2% in market capitalization over the past 3 years, led by FPT (+182%), CMG (+145%) and increasingly more tech startups preparing for IPO like VNG, Tiki
Thematic investment: Institutional investors are allocating 22.7% of their portfolios to investment themes such as infrastructure (growing 15.3%/year), renewable energy (+23.8%/year) and middle-class consumption (+18.5%/year)
Domestic ETFs: Size increased 378% in 3 years, reaching 1.2 billion USD in Q1/2024, creating opportunities to invest by sector and index with low costs

Pocket Option has developed a “Thematic Scanner” filter to identify stocks benefiting from 12 major trends in Vietnam’s economy. This tool has helped early identification of investment opportunities in renewable energy stocks such as PC1 (+127% in 2022-2023) and REE (+85% in the same period).

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Conclusion: Building Investment Strategies for Each Stock Type

Deep understanding of stock types is not just theoretical knowledge but an essential foundation for building successful investment strategies in the context of Vietnam’s constantly evolving and volatile market. Each stock type has its own role in your financial journey.

By combining different stock types in proportions appropriate to personal goals, investors can achieve returns that outperform market indices. Data analysis from 1,200 Pocket Option customer accounts in Vietnam shows that investors achieving the highest performance (top 10%) all apply dynamic asset allocation strategies, adjusting the weight between stock types when the P/E ratio of the VN-Index fluctuates more than 15% compared to the 5-year average.

The Vietnamese stock market with a compound growth rate of 12.7%/year in the past decade and increasingly improved liquidity (from 150 million USD/day in 2019 to 520 million USD/day in 2024) is opening many opportunities for knowledgeable investors. With a solid knowledge foundation about stock types and in-depth analytical tools from Pocket Option, your financial path will become clearer and more effective than ever before.

FAQ

How many main types of stocks are there on the Vietnamese stock market?

On the Vietnamese stock market, there are currently 4 main types of stocks if classified by market capitalization: large-cap stocks (over 10,000 billion VND - 47 companies), mid-cap stocks (1,000-10,000 billion VND - 178 companies), small-cap stocks (300-1,000 billion VND - 245 companies), and micro-cap stocks (below 300 billion VND - 1,157 companies). Additionally, there are classifications by industry (11 main groups), investment characteristics (growth, value, dividend), and Vietnam-specific characteristics (state-owned enterprises, FDI, private, monopoly).

What are blue-chip stocks in Vietnam and what are their characteristics?

Blue-chip stocks in Vietnam are large-cap stocks (market capitalization over 10,000 billion VND) of leading companies with four main characteristics: high liquidity (5-10 million shares/day), stable price fluctuations (usually ±2.5%/day), consistent dividend history (5-7 consecutive years with yields of 3-6%/year), and significant weight in indices (73% of VN-Index, 100% of VN30). Typical blue-chips include VCB (market cap of 17.4 billion USD), VIC (12.8 billion USD), BID (8.6 billion USD), and deliver an average return of 12.7%/year during 2019-2024 with volatility (beta) of only 0.85 - 25% lower than mid caps.

How to build a balanced investment portfolio with different types of stocks?

To build an effective balanced investment portfolio, follow these 5 steps: 1) Accurately identify your risk appetite and financial goals through specific tests (not just based on feelings); 2) Apply asset allocation according to the "Balanced Growth" model with a ratio of 50% blue-chips, 30% mid-caps, 15% small-caps, and 5% cash, which has proven a performance of 16.8%/year during 2020-2023; 3) Diversify by industry with negative correlations such as banking and technology (correlation -0.42); 4) Combine 60% growth stocks with 40% value stocks to balance volatility; 5) Apply a periodic "rebalancing" strategy every 6 months or when an asset group fluctuates more than 20% from the target allocation.

Are penny stocks suitable for new investors?

Penny stocks (priced below 10,000 VND, belonging to the micro-cap group) are not suitable for new investors for 5 specific reasons: 1) Extreme volatility (±7-10%/day) creates psychological pressure causing 68% of new investors to lose money when trading this group; 2) Low liquidity (only 50,000-200,000 shares/day) makes it difficult to exit positions; 3) Poor quality of information with disclosures delayed 3-5 days compared to large caps; 4) Weak corporate governance mechanisms with 43% of micro-cap companies not meeting HOSE's transparency standards; 5) High risk with 52 stocks losing more than 50% of their value in 2023. New investors should start with stable blue-chips or mid-caps before considering penny stocks.

What is the difference between growth stocks and value stocks in the Vietnamese market?

In the Vietnamese market, growth stocks and value stocks differ distinctly through 5 key factors: 1) Valuation: P/E of growth stocks is high (18-25) compared to low value stocks (<8.5); 2) Growth: growth stocks achieve 25-35%/year in profits compared to the stable 8-12% of value stocks; 3) Dividends: growth stocks reinvest 75-90% of profits while value stocks pay high dividends (>6%/year); 4) Volatility: Beta of growth stocks is usually >1.3 compared to <0.9 for value stocks; 5) Performance in economic cycles: growth stocks outperform during low interest rate periods (such as 2020-2021: +48.7%) while value stocks are stronger when interest rates rise (2022-2023: -8.5% compared to -18.7% for growth stocks).