Due to its proximity to and trading relationship with the U.S., Mexico has been a favored destination of conservative emerging markets investors. The allure of Mexican equities and EWW was expected to increase after the country initiated political and energy sector reforms last year, but although Latin America’s second-largest economy is expected to post GDP growth superior to that of the U.S. and Brazil this year, EWW has tumbled 15.3% over the past year. [South of the Border Slump]
EWZ has soundly outperformed EWW this year even as Standard & Poor’s lowered Brazil’s credit rating to the lowest investment grade while Moody’s Investors Service raised Mexico’s rating. Year-to-date, EWZ has lost $573.4 million in assets while EWW has added almost $307 million.
iShares MSCI Mexico Capped ETF