The Market Vectors Vietnam ETF (NYSEArca: VNM) is not moving much Wednesday, but the lone Vietnam ETF resides just 4.7% below its 52-week high.

A return to that high and additional gains are not out of the question for the $541.9 million VNM. More than 10% of VNM’s current assets under management tally has come into the ETF this year and more could be on the way as the Vietnamese policymakers and central bankers continue enacting plans that make the frontier market an attractive destination for foreign capital. [Blue Chips Lift Vietnam ETF]

State Bank of Vietnam Governor Nguyen Van Binh told Bloomberg the central bank is urgently trying to enact legislation “for a government-backed asset management company, lenders and investors to buy and sell bad-debt assets and collateral at banks.”

The legislation is crucial because although VNM has tried higher on an annual basis over the past two years, the ETF tumbled in the second quarters of 2012 and 2013 due to fears about the fragility of Vietnam’s banking system, which has been riddled with bad loans and toxic debt. VNM allocates 37% of its weight to the financial services sector, the ETF’s largest sector allocation. [Vietnam ETF Rallies on Higher Foreign Ownership Limits]

“Moody’s Investors Service estimated bad debt at Vietnamese banks comprised at least 15 percent of total assets in a note last month,” Bloomberg reported. The Vietnamese Asset Management Company, that country’s spin on TARP, has purchased almost $2 billion in bad loans and debt since the end of 2013. In the past 90 days, VNM has surged 20.1%, easily outpacing major emerging and frontier markets benchmarks in the process.

On Monday, Vietnam’s benchmark VN Index touched a new 52-week high Monday, helped by news of VNM buying some new securities to add to its lineup. VNM is adding food producer Masan Group and Petrovietnam Transportation along with real estate firms Vingroup and HAGL, Reuters reported.

Market Vectors Vietnam ETF