Against a challenging backdrop, the iShares MSCI Turkey ETF (NYSEArca: TUR) is up 9% year-to-date. While the performance of the lone exchange traded fund dedicated to Turkish stocks lags that of the MSCI Emerging Markets Index, it is still solid when considering data suggest economic growth there is slowing.

Some market participants believe political risk in Turkey exceeds that of other emerging markets, meaning it is too soon for investors to consider supposed bargains in Turkish stocks. Additionally, there are lingering concerns the country could be tagged with another credit downgrade this year.

Furthermore, the increased security risks also pressured investors’ outlook, notably the Islamic State claimed that the New Year’s attack at the Reina nightclub shortly after Istanbul rang in the new year.

The good news is that a rally could be coming for Turkish stocks following Sunday’s constitutional referendum.

“That’s the opinion of Bank of America/Merrill Lynch analysts Ferhan Salman, Gabriele Foa & David Taranto, who reflect on Turkey’s constitutional referendum to be held Sunday, April 16. Citizens face a yes-no vote on more than a dozen constitutional changes that would give longtime leader and current President Recep Tayyip Erdogan more power,” reports Dimitra DeFotis for Barron’s.

Last year, Turkish stocks and TUR tumbled following a failed coup. Turkish markets plummeted on concerns of the implications of the ensuing political turbulence after a failed coup d’etat attempt from the military branch.

In August, Turkey’s central bank lowered interest rates by 25 basis points to 8.75% and said it stands ready to provide liquidity to the country’s banks, if needed, an important factor considering TUR’s weight to financial services stocks is almost 44%, or more than triple the ETF’s second-largest sector allocation.

Importantly, Turkish stocks are not expensive and that could open the door for more upside.

“In equities, the market recovered in January, but price/earnings ratios and price/book ratios are still 10% and 20% below historical averages, respectively, in a context where emerging market equities are trading in line with long-term valuations. Turkey is a cheap market with relatively high earnings-per-share growth. Investors cut Turkey overweight in July [after the attempted coup]and did not add back. We remain overweight Turkish equities,” according to the Bank of America Merrill Lynch note seen in Barron’s.

For more stories on the lone Turkey ETF, visit our Turkey category.