Franklin FTSE Mexico ETF

FLMX

Market cap $86.6M

Mexico's stock gains are holding despite the country's dependency on exports to the U.S., and the two leaders' discourse turning from warm to prickly.

The central bank's board voted unanimously to leave the overnight interest-rate target at 6.5%, and reiterated that they expect to stay on hold for the foreseeable future.

Exports of manufactured goods increased by 34% to $65.69 billion, mining exports rose 71% to $2.08 billion, and agricultural exports edged up 0.1% to $2.23 billion.

A beneficiary of nearshoring, Mexico is a real economy market with indirect exposure to the AI infrastructure build-out. Recent relative outperformance driven by industrials and materials, with supportive valuations and a rate-cutting cycle.

Mexico is well-placed to beat other emerging markets because it has strong economic fundamentals and a lack of financial excesses.

The board of governors voted 3-2 to cut the overnight interest-rate target by a quarter of a percentage point to 6.75%, resuming monetary easing.

Dan Clifton, Strategas head of policy research, joins 'The Exchange' to discuss the economic fallout from the recent tariff push, the new rules and much more.

Dan Clifton, Strategas head of policy research, joins 'The Exchange' to discuss Clifton's thoughts on recent trade headlines, U.S.-China trade deals and much more.

EWW and FLMX have delivered strong YTD returns, outperforming the S&P 500 and ranking highly among international ETFs. Both funds are heavily concentrated in a few sectors and top holdings, with similar performance and minimal cost differences. Mexican equities face valuation concerns, currency tailwinds may reverse, and their long-term track record lags US stocks significantly.

President Trump imposes new 30% tariffs on Mexican and EU imports effective August 1, warning that any retaliatory measures will be matched and added to the base rate