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Emerging markets investors seem to love and hate the Market Vectors Vietnam (NYSEARCA:VNM) at the same time. The volatility in both directions allows them to make money, and those in it for the long term are set up for diversity.

But VNM was the hardest-hit ETF in February, losing nearly 15%. Where’s the love?

  • The ETF Professor at Benzinga reports that VNM has traded in a range of roughly $23-30 since December, which is illustrative of the relationship investors seem to have with the country these days. One reason it’s been hit is what’s been hitting it for a year: Inflation. Vietnam’s central bank has raised rates twice in the past week in order to fight it.
  • Speaking of inflation, electricity costs are about to shoot up more than 15% this month, according to Reuters. This may be a huge problem for inflationary pressure and could put a hurting on the economy.
  • Stephan Alfred at Reuters reports that the dong was devalued 8.5% in February.
  • Sovereign downgrades from Moody’s and Standard & Poor’s hit in December, making it one of Asia’s worst performers.

In its favor, Vietnam boasts a large, young population and factory floor production is up. And you can’t deny that there’s a lot of room for growth in this country, which has already come a long way in the last few decades.

But will VNM return to the big returns it saw last year? Unless Vietnam can get inflation under control and get back to the hard work of building its economy, things might be lackluster for the time being.

Tisha Guerrero contributed to this article.