What is a current account deficit and why is it important for Mexico?

A current account deficit means a country is importing more goods, services, and capital than it's exporting. When this deficit narrows (as Mexico's has to $12.6 billion), it signals improved economic balance and stability. For Mexico, this indicates stronger exports, possibly increased remittances, or better trade terms. A smaller deficit reduces the country's dependency on foreign financing, strengthens its currency, and boosts investor confidence – all positive factors for Mexican businesses and stocks.

What is "nearshoring" and how does it benefit Mexican companies?

Nearshoring is when companies move their operations closer to their target markets, rather than in distant countries. For example, U.S. companies moving manufacturing from Asia to Mexico. This trend benefits Mexican companies through increased industrial activity, job creation, and economic growth. Companies in construction, manufacturing, transportation, and real estate particularly benefit as new facilities are built and supply chains develop. The stocks in this group are positioned to capitalize on this ongoing trend.

Why would a stronger Mexican peso benefit these stocks?

A stronger peso generally indicates a healthier Mexican economy and can benefit stocks in several ways. First, it increases the value of Mexican assets for foreign investors when converted to their home currencies. Second, it reduces costs for Mexican companies that import materials or equipment. Third, it can help control inflation by making imports cheaper. Finally, it signals economic stability, which attracts more foreign investment. For the companies in this group with significant domestic operations, a stronger peso can mean higher profits and stock valuations.

What are ETFs like EWW and FLMX, and how do they work?

ETFs (Exchange-Traded Funds) like EWW and FLMX are investment vehicles that hold a collection of stocks, similar to mutual funds, but trade on exchanges like individual stocks. These specific ETFs focus on Mexican companies – EWW offers broad exposure to the Mexican stock market, while FLMX concentrates on large and mid-sized Mexican companies. They provide a convenient way to invest in Mexico's economic growth without buying individual stocks, offering instant diversification across multiple Mexican companies with a single purchase. They're especially useful for investors who want exposure to Mexico's economic turnaround but may not be familiar with individual Mexican companies.

14 handpicked stocks

Mexico's Economic Turnaround

A carefully curated selection of companies poised to benefit from Mexico's improving economic stability. Professional investors have identified these stocks based on their potential to capitalize on a stronger peso, increased foreign investment, and rising domestic demand.

Han Tan | Market Analyst

Published on June 30

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Mexico MSCI Capped ETF iShares

EWW

Current price

$52.53

This ETF offers broad, diversified exposure to the Mexican stock market, serving as a core holding to capture overall economic improvement.

Fomento Económico Mexicano, S.A.B de C.V

FMX

Current price

$96.32

As a leading beverage and retail conglomerate in Mexico, the company is a primary beneficiary of increased consumer spending and economic confidence.

CEMEX, S.A.B. de C.V.

Current price

$9.06

A global building materials company based in Mexico, it is set to gain from increased infrastructure spending and construction activity driven by econ...

A global building materials company based in Mexico, it is set to gain from increased infrastructure spending and construction activity driven by economic stability.

Grupo Aeroportuario del Sureste, SABdeCV

ASR

Current price

$318.33

Grupo Aeroportuario del Pacifico, S.A.B.

PAC

Current price

$231.96

Grupo Aeroportuario Centro Norte

OMAB

Current price

$102.30

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+19.86%

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About This Group of Stocks

Our Expert Thinking

Mexico's narrowing current account deficit to $12.6 billion signals greater economic stability and reduced vulnerability to global financial shocks. This improved financial health creates opportunities across key sectors as the country experiences renewed growth, increased foreign investment, and a strengthening peso.

What You Need to Know

This collection offers exposure to Mexico's economic recovery through a diverse mix of companies and ETFs. It includes financial institutions, industrial firms, airport operators, consumer businesses, and real estate developers – all positioned to benefit from Mexico's improving macroeconomic conditions.

Why These Stocks

These companies were selected for their significant exposure to Mexico's domestic economy and potential to benefit from increased economic stability. Each business operates in sectors likely to see growth from infrastructure spending, increased tourism, manufacturing expansion, or rising consumer confidence.

Group Performance Snapshot

19.86%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 19.86% over the next year.

9 of 14

Stocks Rated Buy by Analysts

9 of 14 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🌊

Riding the Nearshoring Wave

Companies in this group are positioned to benefit from the "nearshoring" boom as more manufacturers relocate to Mexico due to logistical advantages and improved economic stability.

💪

Stronger Peso, Stronger Returns

As Mexico's current account deficit narrows to $12.6 billion, the peso has room to strengthen further, potentially boosting returns for international investors in these Mexican stocks.

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Infrastructure Boom Ahead

Mexico's economic turnaround is likely to spark increased infrastructure spending, creating substantial growth opportunities for construction, materials, and industrial companies in this group.

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