EWW Benefits From Implicit Dollarization And Staple Exposure

Summary

  • Mexico has lower inflation at the cost of austerity, but a consumer staple-dependent EWW ETF is better exposed than most to worse spending conditions.
  • Implicit dollarization of the Mexican Peso protects American investors from excessive FX risk.
  • The economy depends on remittance, and the state of the US economy is important, and this is where risks lie.
  • Perhaps with limited YTD declines in line with US averages that seem high to us, EWW has directional troubles, but it trades at a fraction of the multiple of US indices.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

Historical Landmark National Palace Building at Plaza de la Constitucion in Mexico City, Mexico

R.M. Nunes

The iShares MSCI Mexico ETF (NYSEARCA:EWW) is idiosyncratic but an interesting geographical ETF that could make sense in the current environment due to exposures to consumer staples. While for US investors there is some logic to a Mexico

EWW holdings

Top Holdings EWW (iShares.com)

While we don't often do macroeconomic opinions, we do occasionally on our marketplace service here on Seeking Alpha, The Value Lab. We focus on long-only value ideas, where we try to find international mispriced equities and target a portfolio yield of about 4%. We've done really well for ourselves over the last 5 years, but it took getting our hands dirty in international markets. If you are a value-investor, serious about protecting your wealth, us at the Value Lab might be of inspiration. Give our no-strings-attached free trial a try to see if it's for you.

This article was written by

Author of The Value Lab
A long-only voice with eclipsing growth through 2020 and 2022 bear markets.

Valkyrie Trading Society seeks to provide a consistent and honest voice through this blog and our Marketplace Service, the Value Lab, with a focus on high conviction and obscure developed market ideas.

DISCLOSURE: All of our articles and communications, including on the Value Lab, are only opinions and should not be treated as investment advice. We are not investment advisors. Consult an investment professional and take care to do your own due diligence.

DISCLOSURE: Some of Valkyrie's former and/or current members also have contributed individually or through shared accounts on Seeking Alpha. Currently: Guney Kaya contributes on his own now, and members have contributed on Mare Evidence Lab.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.