Mexico was the best-performing Latin American market and among the strongest in the MSCI Emerging Markets Index in 2021. Several factors are driving our optimism for Mexico, including a range of fundamental and geopolitical tailwinds. Our recent trip reinforced the reasons to remain bullish.
Mexico has one of the most developed manufacturing industries in Latin America and while it’s an oil producer, it’s not oil dependent. The government has stated it remains committed to free trade and slowly diversifying its export base away from dependence on the U.S. With more than 100 million of the population under the age of 35 and highly skilled, we believe there is plenty of road left for growth within this economy.
Trade: nearshoring for the longer term
As a member of free-trade agreements and an economy with wide-ranging industrial capability, Mexico is in a good position to benefit from companies’ diversifying supply chains and logistics, in our view. In the years ahead, we see a wide range of business sectors gaining from this, including health care, technology, aerospace and pharmaceuticals.
Tourism is back!