EWW's Upside Is Limited In A Peak Inflation Scenario

Nov. 07, 2022 1:44 PM ETiShares MSCI Mexico Capped ETF (EWW)

Summary

  • EWW is exposed to lots of pretty resilient consumer staple exposures that have kept its head above water.
  • Moreover, the Mexican Peso has been a stalwart currency this last cycle, since it trades closely with the very strong dollar.
  • The issue is that if we are approaching a peak inflation and peak rate moment, the declines in the dollar will also bring down the peso.
  • While resilient, upside from here appears limited.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

Teenage Latin boy holding the Mexican flag outdoors

FG Trade Latin/E+ via Getty Images

Our last call on the iShares MSCI Mexico ETF (NYSEARCA:EWW) was a good one. Dollarization and staple exposures kept EWW above water and outperforming the market by 20% as of today. While we still like

EWW sectors

Sectoral Breakdown (iShares.com)

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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.

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