What is "nearshoring" and why does it matter for these stocks?

Nearshoring is when companies move production closer to their end markets instead of manufacturing in distant countries. It matters because companies are increasingly moving production from Asia to Mexico to reduce shipping times, lower supply chain risks, and benefit from trade agreements with the US. This creates significant growth opportunities for companies that build factories, transport goods across borders, or supply materials for this manufacturing shift.

What caused Mexico's export boom?

Mexico's export boom is driven by several factors: trade tensions between the US and China, pandemic-related supply chain disruptions, the USMCA trade agreement (which replaced NAFTA), Mexico's skilled manufacturing workforce, and lower transportation costs compared to Asian production. Companies are recognizing these advantages and shifting production to Mexico, creating a virtuous cycle of industrial growth and investment.

How do airport operators benefit from manufacturing growth?

Airport operators like ASR, PAC, and OMAB benefit from manufacturing growth in several ways. Increased cargo volumes generate more air freight revenue, while business travel rises as executives visit manufacturing facilities. Additionally, as the economy grows from manufacturing activity, both business and leisure travel increase, boosting the airports' retail and service revenues. These companies typically operate under long-term government concessions, giving them stable positions in Mexico's transportation infrastructure.

What is an ETF like EWW and how does it work?

EWW (iShares MSCI Mexico ETF) is an exchange-traded fund that provides broad exposure to Mexican stocks. Rather than buying individual companies, EWW gives you instant diversification across many leading Mexican businesses in a single purchase. The fund holds shares in dozens of Mexican companies across various sectors and tracks the performance of the MSCI Mexico Index. For investors interested in Mexico's export boom but uncertain which specific companies to choose, EWW offers a way to invest in the overall growth story.

How might political or border issues affect these investments?

Political developments and border issues between the US and Mexico could impact these investments in several ways. Trade restrictions or tariffs could temporarily slow cross-border commerce, affecting logistics companies and manufacturers. However, the long-term nearshoring trend is driven by fundamental economic and strategic factors that typically survive political cycles. The deep integration of US-Mexico supply chains and the USMCA trade agreement provide some stability, but investors should monitor policy developments that might affect specific sectors or companies in this theme.

16 handpicked stocks

Mexico's Export Boom

Mexico's surprising trade surplus signals a major economic shift, creating exciting investment opportunities. This collection features carefully selected companies positioned to benefit from the growing trend of nearshoring and Mexico's expanding role as North America's manufacturing powerhouse.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 30