The iShares MSCI Singapore ETF (NYSEArca: EWS) was a solid, though not spectacular performer through the first four-and-a-half months of this year. EWS, which has over $1.2 billion in assets under management, benefited as investors sought a conservative avenue for exposure to Southeast Asia’s growth story. However, EWS did not prove durable during the May/June swoon that plagued so many international ETFs.

EWS closed at $12.68 Tuesday, $2 removed from its May peak and the ETF is now sitting on year-to-date loss of almost nine performance. That dismal run indicates investors have been unimpressed by Singapore’s AAA credit rating, the country’s low unemployment, budget surplus and high per-capita GDP. [Singapore ETF Rallies]

Perhaps more worrisome is that the city-state’s economy grew just 0.2% in the first quarter and economists have slashed their 2013 growth estimates. “In a quarterly survey conducted by the Monetary Authority of Singapore (MAS), private sector forecasters expect a 1.5 per cent growth for the Singapore economy in the second quarter of 2013 — a downgrade from an earlier estimate of 2.0 per cent growth,” according to Channel News Asia.

The government is forecasting full-year growth of 1% to 3% while the consensus estimate from private economists was pared in June to growth of 2.3% from a March forecast of 2.8%. The outlook for 2014 is far more encouraging with growth expected to hit 3.8% and that could mean patient investors may want to consider EWS.

There is a good news story with EWS. Stocks in Singapore are cheap and that has at least one noted bank advocating a bullish stance. Singapore’s Straits Times Index has a P/E ratio of just 11.7 and Goldman Sachs sees upside of 19% through next March, according to CNBC. Goldman has an overweight view on Singapore, but is underweight other Asia-Pacific markets such as Australia, Hong Kong, Malaysia, Philippines and Taiwan. Like Singapore, Australia and Hong Kong each have AAA sovereign credit ratings.

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