While not classified as an “Emerging Market” by index providers, the country of Mexico is obviously geographically located near Brazil, a leading emerging market as well as other burgeoning South American economies such as Colombia and Chile.
Currently, there are a few ways to play the Mexican equity market via ETFs.
The iShares MSCI Mexico (NYSEArca: EWW) tracks the MSCI Mexico Investable Market Index and the fund has been around since 1996, giving it quite a bit of tenure on the vast majority of ETFs that are out there.
During this time, EWW has amassed about $1.2 billion in assets under management. EWW is relatively “top heavy” in that 22.34% of the fund is in AMX (America Movil), 11.03% is weighted towards Wal Mart de Mexico, and 7.93% of the fund is invested in Fomento Economico Mexicano.
So, figure 40% of the entire index is invested across three equities, with the remaining 45 positions in the index making up the remaining 60% of the index. Additionally, about a third of the index is weighted in the Consumer Defensive sector.
Global X Mexico Small Cap (NYSEArxca: MEXS) debuted in May of 2011 as a way for investors to get exposure to small cap equities in Mexico, but thus far, the fund trades very low volume on a daily basis and has only attracted about $600,000 in assets.
For those looking to enact leveraged trading strategies on Mexico, ProShares UltraShort MSCI Mexico Investable Market (NYSEArca: SMK) offers two times daily leverage on the short side of the equation and ProShares Ultra MSCI Mexico Investable Market (NYSEArca: UMX) conversely provides two times daily leverage to longs looking to play Mexico.
How has Mexico fared in relation to other Latin American equity markets? Year to date, Mexican small caps have fared rather well, with MEXS up 20.94% versus iShares MSCI Brazil (NYSEArca: EWZ) up 19.67%, iShares MSCI
Chile (NYSEArca: ECH) up 16.33%, Global X Colombia (NYSEArca: GXG) up 19.57%, and iShares Latin America 40 (NYSEArca: ILF) having rallied 13.55%. The larger cap oriented EWW on the other hand has trailed Latin American peers, and is only up 11.57% year to date.
iShares MSCI Mexico
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