This Another Great Reason To Love Mexico
There are a lot of reasons to believe Mexico is a good investment. It is among the strongest emerging markets outside Asia and that is due to a number of factors. Reforms initiated under the previous President have born fruit in that Mexico is steadily shifting to a manufacturing and consumer driven economy. These reforms have earned Mexico a spot on the global stage as an import/export nation, and one that is expected to see economic activity expand and accelerate over the next 3 to 5 years.
As if I needed any fresh evidence, a recent announcement from Netflix confirms what I’ve already known. Netflix is planning on opening an office in Mexico sometime later this year and has more than 50 projects underway in the country. The projects range from local films to Netflix premium content and provide thousands of jobs to locals residents. Among the many projects slated for production are several series intended for the Mexican market.
According to Ted Sarandos, Netflix Chief Content Officer, “The richness of talent in front of and behind the camera in Mexico was key in our decision to begin our local production strategy with ‘Club de Cuervos’ four years ago. Since then, we have continued to expand our local investment and continue providing a platform for Mexican talent to be recognized around the world.”
And Netflix is not the only company to see rapid expansion within Mexico. America Movil, the largest provider of cellular communications in Latin America, has seen strong increases of net pre-paid additions in Mexico with that figure surging to 550,000 in the last quarter. Over the past year net adds are up 65% in the country and not expected to slow anytime soon.
If you are looking for exposure to emerging markets Mexico is a great choice. It is clear from Netflix announcement and results from America Movil that there is money to be made. You can get broad exposure to Mexico’s economy through the Mexico Fund (MXF), a closed-end fund focused on Mexican listed equities with headquarters and primary business in Mexico. The fund is geared toward growth and income paying a dividend according to a managed distribution plan.
The fund is allocated across several sectors but is heavily weighted toward Mexico’s fastest growing sectors including the industrials, the consumer, and financials. Coincidentally, all three of these sectors are expected to lead global earnings growth in 2019.