How to get a piece of Mexican stocks

There are 21 ADRs, from consumers to manufacturers, including materials, food and beverages. The most owned is America Movil, the region’s main wireless operator and controlled by Mexican billionaire Carlos Slim; others include Coca-Cola Femsa, Cemex, and Fomento Economico Mexicano. These stocks are listed in dollars and trade on the US stock exchanges; investors can buy them the same way they would buy shares of a large US company.

There is only one pure play ETF – iShares MSCI Mexico Investable Market Index Fundbut its top five holdings represent about 51 percent of the fund’s holdings. Launched in 1996, it is one of Mexico’s oldest investment vehicles and, with net assets of $ 1.2 billion, one of the largest.

The ETF typically mimics the MSCI Mexico Investable Market Index and includes ADRS and stocks listed on the Mexican Stock Exchange.

Many market strategists and fund managers discourage retail investors from buying so-called single-country funds and instead recommend buying regional or even global funds to spread risk. (Following:Mexico … Land of surprising opportunities)

Most single-country vehicles, mutual funds, or ETFs, “tend to be quite heavy and also concentrated by sector,” says Bill Rocco of Morningstar.

Seven Latin American ETFs have a weighting of 20 to 30 percent, eight have a weight of 10 to 20 percent, and a dozen weighs 9 to 12 percent.

There are currently nine mutual funds for this region with a Mexico weighting of 20% or more.

The largest is Epiphany FFV Latin America A with 35% as of June 30, according to Morningstar. Three of its main holdings are Mexican companies: Grupo Modelo, Coca-Cola Femsa and America Movil.

Fidelity’s Latin American Fund is one of the largest with assets of $ 2.48 billion, while BlackRock Latin America is one of the oldest; two of its top five titles are Mexican: Movil and Fomento.

Dozens of other mutual funds in Latin America, global and international emerging markets have smaller Mexican holdings, around 5%.

Most of the funds mentioned invest most of their capital in Mexican stocks, which managers describe as a relatively small universe. Popular stocks traded on Mexico Bolsa include Wal Mart de Mexico and Grupo Modelo.

The Federated InterContinental Fund, for example, currently has nine Mexican stocks in its portfolio. Four are ADRs, while five are local.

Minimum investments range from $ 1,000 to $ 2,500.

ETFs fees are lower than mutual funds, which typically run at least 1%; the iShares Mexico ETF, for example, charges just 0.52 percent.

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