On a year-to-date basis, the Market Vectors Vietnam ETF (NYSEArca: VNM) has done little to deserve investors’ confidence. The lone exchange traded fund tracking the fast-growing Southeast Asian nation is down more than 4%.

VNM’s performance through the latter half of the first quarter was far worse. From Feb. 23 through March 31, the ETF plunged 13.7%. Surprisingly, VNM saw modest inflows during the first quarter, but the real news is the ETF’s recent rally, one that has been all but ignored as investors put capital to work in other international markets.

With Wendesday’s 3.7% gain, which occurred on volume that was more than triple the trailing three-month average, VNM is up nearly 10% this month. As is the case with select China ETFs that have recently been surging, investors are missing out on VNM’s rally as the ETF has suffered $16 million in outflows this month. [Investors Miss Vietnam ETF Rally]

Though Vietnamese economy is in fine shape, stocks there have not responded favorable demographics and rising consumption with the benchmark VN Index barely nudging higher while Asian markets from China to the Philippines surge.

The upside to the lethargy in Vietnamese stocks is favorable valuations. For example, the price-to-earnings ratio on VNM is slightly below that of the iShares MSCI Frontier 100 ETF (NYSEArca: FM) while VNM’s price-to-book ratio of 1.3 is less than half that of the broader frontier fund. Vietnamese stocks account for 3.7% of FM, the frontier ETF’s ninth-largest country weight.

Last year, Vietnam formed a commission to explore taking the necessary steps for the country to shed its frontier status and gain entry into the widely followed MSCI Emerging Markets Index.MSCI does not have Vietnam on its list of markets that could potentially be upgraded to emerging markets status. When the index provider revealed its annual market classifications in June, no frontier markets were listed as being in line for a possible upgrade to emerging markets status. [Vietnam Wants EM Promotion]