Peso Problems for the Mexico ETF

As an oil exporter, Mexico’s currency has been hit by the falling crude oil prices – ETF investors should keep in mind that while Mexico has a large oil industry, none of the country-specific ETFs include exposure to the sector. Rather, EWW is heavily allocated to defensive sectors, such as consumer staples and telecom.

“We estimate that private consumption grew by 3.6% year over year in the fourth quarter of 2015 versus 2.9% in the third quarter, thus driving GDP growth … the [November] results point to a halt in the uptrend of private consumption spending in the final quarter of 2015, although we have estimated that it grew … leading to 3.1% growth in 2015 as a whole, faster than our GDP forecast (2.5%) for that year. Looking forward, we estimate that consumption will continue to grow healthily in coming months on the back of gains in formal employment, real wages, remittances and consumer credit,” according to the Citi note posted by Barron’s.

iShares MSCI Mexico Capped ETF