The Mexican stock market, as represented by EWW, has managed to beat the S&P 500 by almost 50 percent over the past 25 years. Mexico's economy has very significant structural advantages, mainly resulting from proximity to the U.S. EWW's holdings tend to be very high-quality businesses, and I believe that the ETF is structured better than many other single-country emerging market funds.
US stocks staged a partial recovery on Monday after initially plunging on fresh tariff concerns. The Dow Jones Industrial Average rebounded from a steep intraday drop after President Donald Trump announced a temporary halt to tariffs on Mexican goods.
Political and macro uncertainties have reduced EWW's EPS growth estimates and price targets, reflecting concerns about future prospects. EWW trades at historically low valuations with a 9.3x PE on YE25 estimates, suggesting any positive news could trigger a rally. I upgrade EWW to Hold due to discounted valuations but caution against Trump tariff threats that could severely impact Mexico's economy.
Asset Management Industry | Financial Services Sector | - CEO | XSGO Exchange | US4642868222 ISIN |
US Country | - Employees | - Last Dividend | - Last Split | - IPO Date |
The company operates as an investment fund focused primarily on the equity market of Mexico. It commits to allocating at least 80% of its assets towards securities that are part of its underlying index or investments closely mimicking the economic characteristics of these securities. This strategy aims to closely track the performance of a specifically designed index that reflects the comprehensive landscape of large-, mid-, and small-capitalization segments within the Mexican equity market. Furthermore, the fund identifies as non-diversified, meaning it may concentrate its investments more heavily in fewer securities, potentially increasing its risk and return profile.
The fund dedicates the majority of its portfolio, at least 80%, to the securities that comprise its underlying index. These investments are selected to ensure that the fund's performance closely parallels the economic characteristics of these component securities, thereby aiming to replicate the index's performance.
Its investment approach is centered on a free float-adjusted market capitalization-weighted index. This underlying index is meticulously constructed to measure the performance across large-, mid-, and small-cap segments of the Mexican equity market, offering a broad exposure to its investors.
Unlike diversified funds, this investment vehicle takes a concentrated approach by investing more significantly in fewer assets. This strategy is designed for investors seeking potentially higher returns that come with higher risk, owing to the focused nature of its investments within the Mexican equity market.