The iShares MSCI South Africa ETF (NYSEArca: EZA), the lone ETF devoted to Africa’s largest economy, has been a tale of two ETFs this year. Year-to-date, the fund is down 9.7%. Since June 20, however, EZA is up 20.5%, a gain good enough to put it in bull market territory.

South Africa’s status as a major gold producer, the world’s largest platinum mining nation and the second-largest palladium producer previously highlighted EZA as one of many emerging markets ETFs vulnerable to slowing economic growth in China and Federal Reserve tapering. EZA does not hedge its foreign currency exposure meaning that the ETF has been vulnerable to the sagging rand, one of this year’s worst emerging currencies. [Metals Rebound Helping South Africa ETF]

Although the materials sector is less than 12% of EZA’s weight, or less than half the weight allocated to financial services, the fund’s largest sector weight, EZA is correlated to price action in precious metals miners. That was a problem earlier this year, but recently miners have rallied, helping EZA along thej way. China and central bank physical gold demand remains robust and gold jewellery recycling has dropped sharply, tightening the physical supply-demand balance, according to ETF Securities. Additionally, palladium demand remains robust due to soaring U.S. auto sales. [Gold ETFs Slide as Markets Eye Fed Tapering]

Despite EZA’s recent bullishness, South African equities have some doubters. During the recent gold miners rally, South African miners such as Gold Fields (NYSE: GFI), AngloGold Ashanti (NYSE: AU) and others lagged rivals like Barrick Gold (NYSE: ABX).

J.P. Morgan thinks South African miners will catch up to gold-backed ETFs, but the bank is bearish on the rand and that is not a good thing when South Africa is contending with its own current account deficit woes. The tumbling rand caused yields on South African sovereign debt and the credit default swaps used to insure those bonds to spike in June. [South Africa ETF Falls as Rand Hits 4-Year Low]

HSBC is less enthusiastic about South African miners, rating AngloGold Ashanti sell and Gold Fields neutral, according to Barron’s. Those stocks combine for just 3% of EZA’s weight.

Another potential strike against South African equities is that they are richly valued at a time when developing markets from China to Russia to South Korea are trading at discounts to the broader emerging markets universe.