Battered by Trump, There's Long-Term Opportunity With This ETF

By now, many investors know that few, if any, exchange traded funds were adversely affected by Donald Trump’s surprise victory in last week’s U.S. presidential election on par with the iShares MSCI Mexico Capped ETF (NYSEArca: EWW).

EWW, the largest ETF tracking stocks in Latin America’s second-largest economy, has plunged more than 15% over the past week as investors have fretted that Trump will move forward with plans to build a wall around the U.S./Mexico border while possibly looking to unwind the North American Free Trade Agreement (NAFTA).

With the peso also sliding in the wake of Trump’s win, the Mexico’s central bank could move forward with more rate hikes to stem the currency’s slide. Although Mexico’s central bank said the first rate hike earlier this year was not the start of a new tightening cycle, the central bank surprised global investors last month when it boosted borrowing costs by 50 basis points to 4.75%, which is good for the country’s highest interest rate since 2009.

The Mexican peso experienced its worst two-day loss in 22 years as investors worried about how U.S. president-elect Trump’s policies could affect exports from our Southern neighbor, reports Michael O’Boyle for Reuters.

Citigroup strategist Dirk Willer believes the bloodletting hast just started and the peso currency could weaken to 22 per dollar


Still, some see opportunity for long-term investors with EWW and Mexican stocks.