Top picks 2013: iShares Mexico Investible

As a top investment pick for US investors, considers looking south of the border.

By Jim Powell, Global Changes & Opportunities Report

An emerging nation that is starting to make exceptional progress is Mexico, but few U.S. investors have yet to notice. The country is undergoing a manufacturing revolution and already exports more products to the world than the rest of Latin America combined.



For most investors, the iShares MSCI Mexico Investible Market Index ETF (EWW +0.10%) is the best way to benefit from the Mexican transformación. It is our top pick for 2013.

Here is why Mexico is becoming so successful, and why I urge you to take a position to benefit from the country’s progress:

•  Few countries in the world have made a greater commitment to promoting trade than Mexico. The government signed free trade agreements with 44 other nations, which is more than twice as many as China and four times more than Brazil.
  
•  Mexico shares a 2,000 mile border with the U.S. which gives the country a big advantage over its competitors. Although China can still make most products at a lower cost, the advantage usually disappears when transportation expenses are included.
  
•  Mexico’s close proximity to its markets also means it can quickly respond to the changing needs of its customers.
  
•  Mexico is  in the same time zone as most of its customers; instead of waiting until the middle of the night or the next day to call a supplier in China or India, a U.S. customer can pick up the phone and do business right away with Mexico.
  
•  Mexico also has a young, well-educated and energetic workforce. Over half the population is under 29. Both Japan and China have aging populations that won’t be able to support their high economic growth rates much longer.

The safest, most diversified way to share in the development of Mexico is to buy the iShares MSCI Mexico Investible Market Index Fund, an exchange-trade fund that holds positions in the country’s must successful companies.