Despite being home to a currency that, until recently, had been stubbornly strong and being the first developed market to raise interest rates, New Zealand remains home to a sturdy equity market.

New Zealan’s benchmark NZSE 50 Gross Index is up nearly 11%, having outpace dollar-bloc rivals such as Australia and Canada. On a year-to-date basis, New Zealand’s marquee equity index is the twenty second-best performer in the world, according to S&P Capital IQ.

Following New Zealand’s recent national elections that saw Prime Minister Jonathan Key win a third term, some analysts and market observers see further upside for New Zealand equities and the iShares MSCI New Zealand Capped ETF (NYSEArca: ENZL), the lone New Zealand ETF.

Despite not one but two interest rate hikes by the Reserve Bank of New Zealand this year, the New Zealand dollar has tumbled nearly 11% against its U.S. rival since early July. Interestingly, ENZL, which is chock full of companies that previously bemoaned the strong kiwi is off 8.4% over the same period. [New Zealand ETF Likes Rate Hike]

“Meanwhile, the performance of the New Zealand dollar (or kiwi) both bilaterally vis-a-vis its American rival and multilaterally on a real effective, trade-weighted basis turned negative in mid-July. Yet, kiwi’s depreciation, in spite of relatively high domestic interest rates, should eventually improve the nation’s competitiveness abroad, enhancing the prospects for a reversal in the deteriorating pattern of the trade balance in the months ahead,” said S&P Capital IQ in a recent research note.

The research firm has an underweight rating on the $140.2 million ENZL. Investors have displayed little patience for a potential ENZL as the kiwi has tumbled. In the third quarter, $16 million has been pulled from ENZL while the iShares MSCI Australia ETF (NYSEArca: EWA) has added $21.7 million in new assets. [New Zealand ETF at a Crossroads]