The iShares MSCI Mexico Index has been getting quite a bit of attention on the world stage over the last few months,and now MSN Money has even jumped on board,naming it one of the “Top Picks” for 2013. The reason for the increased attention is simple: Mexico has a fast growing manufacturing base that has helped what has become Latin America’s second largest economy earn the title of “the China next door,” referring to the nation’s close proximity to the U.S. and Canada.
“Manufacturers setting up in Mexico must be the most under-reported mega-trend in global investing,” writes MSN Money. “Today,Mexican companies design,develop and manufacture some of the most complex products in the aerospace,automotive,medical and electronics sectors.”
Mexican wages were reportedly a whopping 237 percent higher than Chinese wages in 2002,but today the difference has been reduced to just 15 percent – a number that is expected to continue to go down and become more competitive as wages in China rise and the high cost of transportation continues to have an effect. As a result,Mexico’s close geographic proximity to the U.S.,combined with its increasingly skilled workforce,makes it an ideal location for a variety of companies to set up shop.
“Since joining NAFTA in 1994,Mexico’s trade with the U.S. has been duty-free,” writes MSN Money. “Mexico also has international trade agreements with 44 different countries.”
Add to this the fact that the regulation and protection of intellectual property rights in China presents serious challenges,and it’s easy to see why Western manufacturers are increasingly opting to do business in Mexico. Perhaps this is why Mexico’s economy has remained so strong despite the global economic crisis and the effects it has had on other nations over the last few years.
“In early 2012,Mexico’s Gross Domestic Product (GDP) grew at an annual rate of 4.6 percent,” writes MSN Money. “Mexican car exports to the United States have now exceeded those from Japan,Korea and Germany.”
As for the iShares Mexico Investable Market Index Fund (EWW),this investment vehicle is designed to duplicate the MSCI Mexico Investable Market Index,which consists of a variety of different stocks that are traded mainly on the Mexican Stock Exchange. According to MSN Money,Mexico is poised to quickly become Latin America’s biggest economic success story in history,making this the ideal time to invest in Mexico real estate.