Sizzlin' Returns: Mexico Funds Enjoy Big Gains
With Cinco de Mayo approaching, now is a good time for some appreciation of our neighbor to the south. But investors holding the closed-end (MXE - Get Report) Mexico Equity & Income Fund (MXE) are already feeling some appreciation.
The fund's 23.68% total market return for the first quarter captured second place among all closed-end funds. More impressively, its 86.15% gain led the pack for the 12 months ended March 31.
If that weren't enough, it earned a 40.95% three-year annualized return, which was bested only by the closed-end (LDF) Latin America Discovery Fund (LDF) and the (LAQ - Get Report) Latin America Equity Fund (LAQ). And just to round things out, it also placed third among all closed-end funds with a total market annualized return of 20.03% for 10 years.
Obviously, Mexico has become a destination for investment. As if to underscore that fact, Forbes announced earlier this year that Mexican telecom magnate Carlos Slim Helu surpassed Berkshire Hathaway's (BRKA) Warren Buffett to become the world's second-richest person.Along with the Mexico Equity & Income fund, two others provide essentially pure plays in the Mexican market: The iShares MSCI Mexico (EWW) exchange-traded fund is 100% invested in Mexican investments, while the closed-end Mexico Fund has 92.4% of its portfolio in the country. For a broader list of funds with Mexican investments, see the accompanying table below. The portfolios of all open-end and closed-end funds as well as ETFs in TheStreet.com Ratings' database were searched for Mexican investments. The table contains the top 10 open-end funds, top five ETFs and top five closed-end funds, arrayed by percentages of Mexican portfolio holdings.
|Funds With Mexican Investments|
|Name, Ticker, TheStreet.com Ratings Grade||No. of Mexican Holdings||% of Potfolio in Mexico||Value of Mexican Holdings ($Mil.)||YTD Total Return (%)||12-Month Total Return (%)|
|Open-End Mutual Funds|
|Fidelity Latin American Fund (FLATX) B-||14||36.5||1,136.6||10.40||28.15|
|DWS Latin America Eq Fund A (SLANX) C+||9||33.4||263.2||11.23||27.40|
|T. Rowe Price Latin America (PRLAX) B-||9||28.1||620.7||11.45||32.62|
|BlackRock Latin America A (MDLTX) C+||13||25.8||133.0||13.25||32.19|
|Van Kampen Emerging Markets A (MSRAX) C+||6||12.7||62.0||7.87||21.19|
|AIM Trimark Fund A (ATKAX) A+||3||12.3||5.5||3.29||8.37|
|Phoenix Insight Emerging Mkt A (HEMZX) C-||6||11.9||29.7||6.76||18.14|
|Eaton Vance Emerging Mkts A (ETEMX) B||4||11.7||20.5||3.90||10.32|
|Seligman Emerging Markets A (SHEMX) B-||7||10.3||11.0||7.64||19.00|
|Franklin Global Communications A (FRGUX) B-||2||9.9||8.7||9.08||18.60|
|iShares MSCI Mexico (EWW) A||24||100.0||1,202.8||10.15||43.43|
|iShares S&P Latin American 40 (ILF) A||9||35.8||545.5||13.16||31.97|
|BLDRS Emerging Market 50 ADR (ADRE) B-||5||15.2||41.7||6.86||23.56|
|iShares MSCI Emerging Markets (EEM) B-||19||7.2||1,094.2||7.96||19.69|
|Vanguard Emerging Markets ETF (VWO) B+||24||6.1||773.9||7.90||17.56|
|Mexico Equity & Income Fund (MXE) B||31||99.2||85.9||48.67||114.65|
|Mexico Fund (MXF) A+||27||92.4||597.8||1.44||37.88|
|Latin American Discovery Fund (LDF) B||7||28.7||76.3||6.09||38.14|
|Herzfeld Caribbean Basin Fund (CUBA) B-||40||14.8||2.2||-27.36||53.41|
|Morgan Stanley Emerging Markets (MSF) B-||7||8.9||51.7||3.43||28.04|
|Data as of April 27, 2007
Source: TheStreet.com Ratings and Bloomberg
The results are impressive. Of the 20 funds in the table, 16 have TheStreet.com Ratings' buy grades, with four in the A range, including two with the highest mark of A+. A dozen also qualified as buy recommendations with grades in the B range, and the remaining four funds in the table were rated as holds with marks in the C range. No grades in the D and E ranges are to be found, which would designate them as sell recommendations. It's worth taking look at a list of popular Mexican investments held by U.S. funds (below). It shows the number of funds holding each security as well as the cumulative value of the funds' positions in it. The table reflects the combined holdings of open-end mutual funds, closed-end funds and ETFs. In total, 759 U.S. funds hold $344.4 billion in 89 Mexican investments.
|Favorite Mexican Investments of U.S. Funds|
|Name||Ticker||No. of U.S. Funds Holding*||Value of U.S. Funds' Holdings ($Mil) *|
|Top Mexican Holdings
By All Types of U.S. Funds:
|America Movil SAB de CV||AMX||360||11,457.7|
|Grupo Televisa SA de CV||TV||214||3,801.1|
|Cemex SAB de CV||CX||148||3,756.6|
|Telefonos de Mexico SAB de CV||TMX||114||2,426.9|
|Fomento Economico Mexicano Sab||FMX||160||2,057.9|
|Wal Mart de Mexico SA de CV||WMMVF||132||2,036.4|
|Grupo Financiero Banorte||70||1,137.2|
|Cementos de Mexico SA de CV||CXMSF||30||884.4|
|Corporacion Geo SAB de CV||43||619.3|
|Grupo Aeroportuario Del Pacifi||PAC||57||506.8|
|Grupo Modelo SA de CV||48||500.9|
|Kimberly Clark De Mexico Sab D||47||477.0|
|Grupo Mexico SA||46||466.5|
|Desarrolladora Homex SA de CV||HXM||43||419.8|
|Consorcio Ara SA de CV||36||352.4|
|Industrias Penoles SA||15||322.1|
|Grupo Aeroportuario del Surest||ASR||36||299.7|
|Fomento Economico Mexicano Sa||6||229.2|
|Empresas ICA SA de CV||ICA||32||219.9|
|Coca Cola FEMSA SAB de CV||KOF||34||197.7|
|Grupo Carso SA de CV||20||194.4|
|Controladora Comercial Mexican||30||167.8|
|Sare Holdings SA de CV||10||99.8|
|Grupo Continental SA||12||90.5|
|Summary by Type of Fund:|
|U.S. Open-End Mutual Funds|
|85 Mexican Investments in 710 Funds||29,576.5|
|U.S. Exchange-Traded Funds|
|27 Mexican Investments in 8 ETFs||3,665.4|
|U.S. Closed-End Funds|
|41 Mexican Investments in 41 funds||1,199.2|
|All U.S. Fund Mexican Holdings|
|89 Mexican Investments in 759 funds||34,441.1|
|* Combined holdings of U.S. open-end, closed-end and exchange traded funds.
Source: TheStreet.com Ratings
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