ETF Trends
ETF Trends

Mexico’s exchange traded fund (ETF) has more or less been holding its own. But for real gains, it may have to piggyback off the U.S. economy.

Despite escalating violence in Mexico’s war against the drug cartel, Mexico’s stock market, the BOLSA, doubled the performance of the MSCI Emerging Markets Index, writes John Derrick for US Funds. [Mexico ETF: An Improved Growth Outlook.]

The Mexican economy stands to benefit from the improving U.S. economy. Whatever growth the United States delivers, Mexico’s economy could do 1.5 times better.

Mexico is highly dependent on us: almost 80% of Mexican exports are shipped here and the numbers are rising. From October to November last year, broad-based exports increased 6.2%, or a 26% year-over-year growth.

Additionally, remittances from the 10% or so Mexican population living outside of Mexico will likely pick up as more job opportunities present themselves in the United States.

General Motors Co. (NYSE: GM) stated that it will invest $540 million for a new motor plant in central Mexico, report Michael O’Boyle Luis Rojas Menas for Reuters. Mexican President Felipe Calderon remarked that “this action shows confidence in Mexico and the conviction of one of the most important companies in the world that Mexico is a safe and productive place to invest.”

For more information on Mexico, visit our Mexico category.

  • iShares MSCI Mexico (NYSEArca: EWW)

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.