Mexico ETF Rides Investment Wave

June 03, 2007 at 1:45 am by Tom Lydon

Mexico’s mutual funds could see another year of double-digit growth due to stable interest rates and the transfer of traditional bank deposits to funds - perhaps exchange traded funds (ETFs) will appeal to investors as well. The dynamics of the fund industry could help it grow about 35%. Funds have prospered from two years of solid growth as falling interest rates have made funds more attractive in comparison to low-yielding certificates of deposit and savings accounts offered by the country’s banks, reports Ken Parks for The Wall Street Journal. The Bank of Mexico has lowered rates to 7% for overnight lending and this has helped the industry grow 38.2% year-over-year. In Mexico, local investors are more into diversification instead of timing the market. Here in the U.S., we can use iShares MSCI Mexico (EWW) to benefit from the country’s growth. It is up 23% year-to-date.