My Global Resource Hunter subscribers took a round of gains on the iShares MSCI Mexico Capped Investable Market Index Fund (EWW) earlier this year. We grabbed it again recently and the position is showing an open gain.
Here there are some of the fundamental reasons:
Government Reforms: President Enrique Pena Nieto took charge in Mexico in December. He is impulsing pro-business, reform-minded politician and opening Mexico’s telecom, television and energy markets:creating opportunities for investors.
Higher Sovereign Rating: Thanks in part to Nieto’s reforms, Standard & Poor’s upgraded the outlook for Mexico’s sovereign credit rating to positive from stable. This signals a possible upgrade in the next 18 months, which is attracting foreign investment.
Making Good business with Neighbors Thanks to the North American Free Trade Agreement, Mexico’s economy is leveraged to U.S. economic growth — and the U.S. economy is growing thanks to our energy boom and other factors.
Mexico became a place where U.S. companies outsourced their labor. Manufactured goods represent 71% of Mexico’s total exports, with 79% of its total exports going to the United States.
Demographics: More than 55% of Mexicans are 30 years old or younger. This is a generation that is growing wealthier than their parents, and they want to buy cars, eat, dress well and invest.
For a while, Mexico lost business to China. But now manufacturing is shifting back to Mexico due to rising labor costs in China and increased transportation costs.
Does Mexico have problems? Yes. Problems are still going on, and there are many issues to fix, but there is also tremendous opportunity, and an investor would be foolish to ignore it.
This is a time to get busy and make the most of the opportunities in front of you. And I think a very good opportunity lies south of the border.
Mexican Caribean is no doubt one of the most interesting places to invest. Real Estate and business opportinities are happening right here, right now. If you need some help to know more about these issue, contact us today.