From political unrest in Thailand to deepening fiscal strains in Indonesia to natural calamities in the Philippines, it’s been a season of discontent in Asia.

Investors have taken note. The iShares MSCI Thailand Capped ETF (NYSE: THD) and the iShares MSCI Philippines ETF (NYSE: EPHE), for example, have both slid more than 30% since May, while the iShares MSCI Indonesia ETF (NYSE: EIDO) is off more than 40% in that time.#-ad_banner-#

Farsighted investors are watching these markets closely, because such deep sell-offs only come once or twice every decade, and often represent profound buying opportunities. But bottom-fishing may be premature. Though these markets are now quite inexpensive by a range of metrics, conditions could worsen before they improve.

Yet away from the spotlight, another emerging market is finally getting its act together, building a platform for sustained long-term growth. And its 90 million consumers represent one of most promising yet untapped consumer classes you’ll find.

I’m talking about Vietnam, which I first profiled back in 2010 as part of a group of countries known as CIVETS (Colombia, Indonesia, Vietnam, Egypt and South Africa). Back then, I noted that “Vietnam has unfortunately been beset by a range of problems, most notably stubbornly high inflation of 9%, trade deficits, an 8% government budget deficit and a government that seems ill-equipped to handle the transition from communism to capitalism.”

Yet I added that “Vietnam’s future is quite bright once it tackles these problems.” Fast-forward to 2014, and that day has arrived.

Taming Inflation And Cleaning Up The Banks
Vietnam’s economy grew at least 8% in 2006, 2007 and 2008, but a poor national infrastructure led to surging inflation, which stubbornly remained in the teens. Since then, the country’s infrastructure investments have begun to relieve some of those bottlenecks, and coupled with a tighter monetary policy, inflation has rapidly fallen, to around 6% in 2013. That’s the lowest in a decade.

In recent years, the Vietnamese economy was also hampered by a troubled banking system. Many loans were souring and lenders were hesitant to issue new loans. In response, the government created the Vietnam Asset Management Co. (VAMC) to buy up and restructure troubled loans, along the lines of the United States’ Troubled Asset Relief Program. The move paid off as banks began lending again in 2013, helping to reinvigorate growth.

The government is also boosting the banking system’s capital by raising the levels of foreign ownership. A move to privatize many state-owned industries is also being planned, starting with an IPO for the nationalized Vietnam Airlines.

Vietnam’s economy grew at a decade-low 5.4% in 2012, though that rate rebounded to 5.8% in 2013. Those figures are well below this economy’s growth rate potential when you consider the rapid growth expected for the country’s middle class.

Living Within Its Means, Fighting Corruption
Vietnam is also avoiding the curse that accompanies any fast-growing economy: a too-strong appetite for imports. The country’s imports and exports are on par with each other, at $120 billion through the first 11 months of 2011. That’s in stark contrast to countries like Turkey and India, which are running staggering trade deficits.

Perhaps the most notable and unheralded achievement by the Vietnamese government is a belated effort to tackle high levels of corruption. A high-profile corruption case has dominated the local headlines and if this anti-corruption campaign is successful, it could provide a huge boost to the economy.

The Only Way To Invest Right Now
Whereas many countries can be accessed through a number exchange-traded funds or the ADRs (American depositary receipts) of leading local companies, the Market Vectors Vietnam ETF (NYSE: VNM) is the only current option available to U.S. investors. This ETF delivered decent returns in 2013 while other Asian markets slumped badly, though that only makes up for a relatively dismal performance in prior years. On a three-year basis, this ETF has fallen 8% annually, on average, according to Morningstar.

Roughly 60% of this ETF is invested in Vietnamese banks and energy companies, with another third of the portfolio invested in industrials, materials and consumer discretionary stocks. According to its sponsor, Van Eck, the portfolio carries a trailing price-to-earnings (P/E) ratio of 11.2, which is well below the U.S. market multiple of 16. The price/book ratio of 1.37 is also roughly half of the U.S. equivalent.

In effect, this portfolio reflects solid value metrics, while the country sports robust economic growth prospects.

Risks to Consider: Vietnam’s neighbors are in strife, and social unrest in Cambodia and Thailand could spill across the country’s borders.

Action to Take –> There is simply no way to know how this or any other emerging market will perform in 2014. But for investors with a longer time horizon, Vietnam is shaping up to be one of the most dynamic economic environments for the next decade. As more of the country’s 90 million citizens move into the middle class, growth rates can be sustained above 5% for the foreseeable future, leading profit growth for leading Vietnamese companies to rise at an even faster pace.

P.S. VNM pays a trailing 12-month yield of 3.2% — but that pales in comparison to the high-yielders in our newest advisory, the relaunched High-Yield International. Fully 79% of the world’s best-yielding stocks are outside the U.S. — click here to learn how to incorporate these overseas dividend machines into your portfolio today.