Mexico will soon start pouring money into its infrastructure, benefiting its economy and exchange traded funds (ETFs).

On Monday, Doug Krizner and Dan Grech for Marketplace report, President Felipe Calderon will make his first presidential visit to the United States. He’s planning to visit Mexican communities in Los Angeles, Chicago, Boston and New York in an effort to chart a more independent course for Mexico’s economy.

He’s even more motivated to do that now that the United States is headed for a recession.

As we said yesterday, countries tend to pour money into improving the infrastructure when the economy gets tough. President Calderon has budgeted $25 billion to build highways, bridges and other projects to ensure that his country doesn’t have to depend on the U.S. economy as much.

So far, they appear to be on the right track.

The Mexican peso is strengthening: it rose to a three-month high on Friday after investors bet that the Federal Reserve will cut its benchmark rate in March. Investors who believe the peso will continue its upward trend can hedge the falling dollar with the CurrencyShares Mexican Peso Trust (FXM).

Mexico’s Central Bank cut projections for growth in 2008 by nearly a percentage point. The iShares MSCI Mexico (EWW), however, is up 9.8% year-to-date. Since Jan. 22, it’s been up 7.5%. The fund is currently residing below its trend line, though. If President Calderon’s plan to boost his country’s infrastructure is a success, it could make this fund one to keep an eye on.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.