If you’d like to diversify your portfolio internationally, getting exposure to Latin America’s second-largest economy is an option.
For most people, the most efficient way to do this is by investing in a Mexico ETF. Instead of trying to pick individual stocks, a single Mexico ETF provides easy, broad access to the country’s leading public companies.
When looking at the landscape of Mexican equities, there are two main funds that cater to different investment strategies. Here is a look at both.
iShares MSCI Mexico ETF (EWW)
For investors looking for traditional, long-term exposure to the broader Mexican market, the iShares MSCI Mexico ETF (EWW) is the most widely recognized ETF.
- What it is: EWW seeks to track an index composed of Mexican equities. It is a massive, highly liquid fund that currently holds over $2 billion in Assets Under Management (AUM).
- What it holds: Buying into this fund gives you concentrated exposure to the foundational drivers of the Mexican economy. The portfolio is heavily weighted toward Materials, Consumer Staples, and Financials.
- Top companies: You are investing in industry giants. The fund’s largest holdings typically include the mining conglomerate Grupo Mexico B, the financial institution Gpo Finance Banorte, and the bottling and retail powerhouse Fomento Economico Mexicano.
- The cost: EWW operates with a standard expense ratio of 0.50%, making it a cost-effective way to hold international equities.
What Companies are included in the EWW ETF?
Diving into the individual companies included in the iShares MSCI Mexico ETF (EWW) gives a clearer picture of what you actually own when you buy into the fund. Because this fund is market-cap weighted, a significant portion of its performance is driven by its largest holdings.
Here is a look at the top four companies that currently anchor the EWW portfolio:
1. Grupo México (GMEXICO.B) – Roughly 17.01% of the fund
- What they do: Grupo México is a massive conglomerate and one of the largest copper producers in the world. While mining is their primary revenue driver, they also operate major freight railways in Mexico and have an infrastructure division that builds power plants and oil rigs.
- Why it matters: Because this single company makes up such a large percentage of the ETF, EWW’s overall performance is heavily influenced by global commodity prices. When the price of industrial metals like copper rises, Grupo México typically benefits, pulling the ETF up with it.
2. Grupo Financiero Banorte (GFNORTE.O) – Roughly 10.78% of the fund
- What they do: Banorte is one of the largest and most prominent commercial banks and financial services companies in Mexico. They provide everything from everyday retail banking and mortgages to insurance and retirement fund management.
- Why it matters: A strong banking sector is usually a sign of a growing middle class and a healthy domestic economy. Banorte gives investors direct exposure to the financial health and spending power of Mexican consumers and businesses.
3. Fomento Económico Mexicano (FEMSA.UBD) – Roughly 8.72% of the fund
- What they do: FEMSA is a dominant force in the consumer staples sector. They are the largest independent Coca-Cola bottling group in the world. Additionally, they own and operate OXXO, which is the largest and fastest-growing chain of convenience stores in Latin America.
- Why it matters: FEMSA provides defensive stability to the portfolio. Even during economic downturns, consumers still buy basic beverages and shop at convenience stores. The massive footprint of OXXO stores also gives them an incredibly reliable revenue stream.
4. América Móvil (AMX.B) – Roughly 7.15% of the fund
- What they do: Founded by billionaire Carlos Slim, América Móvil is one of the largest telecommunications corporations in the world. They provide wireless and fixed-line voice services, broadband internet, and pay television across Latin America and internationally.
- Why it matters: As digital connectivity and mobile data usage continue to expand across emerging markets, América Móvil controls the foundational infrastructure that makes it possible. They are deeply embedded into the daily lives of millions of consumers and businesses.
Direxion Daily MSCI Mexico Bull 3X Shares (MEXX)
While EWW is a foundational buy-and-hold asset, advanced traders sometimes look for tools that amplify market volatility.
- What it is: MEXX is a leveraged ETF.
- How it works: This fund is specifically designed to deliver three times the daily performance of the MSCI Mexico IMI 25/50 Index. If the underlying index of Mexican stocks goes up by 1% on a given day, MEXX aims to go up by 3%.
- The risk profile: It is crucial to understand that leveraged funds like MEXX reset daily. Because they utilize complex financial derivatives to achieve that 3X multiple, they are explicitly designed for short-term, tactical trades rather than long-term investing. Over longer periods, the compounding of daily returns can cause the fund’s performance to drift significantly from the actual performance of the underlying Mexican market.
Choosing the right Mexico ETF comes down to your timeframe. If you want a diversified, cost-effective slice of the Mexican economy to hold in your retirement account, a traditional fund like EWW provides the structural stability and liquidity you need.
If you are an active day trader looking to capitalize on a short-term momentum swing in emerging markets, a leveraged instrument like MEXX provides the necessary volatility.
