Stand: 31.05.2022
Market Review Mexico equities were one of the best performers in Latam as well as the wider Emerging Markets, gaining around 5% over the month. At the sector level, Financials and Consumer Staples were best performers, whilst Health Care and Consumer Discretionary lagged. Fund Review During the month, the fund outperformed the benchmark. Contributors to relative performance included Banco del Bajio, a commercial bank, and Gruma, a producer, marketer and distributor of tortillas, corn flour and wheat flour. Detractors included Genomma Lab Internacional, a developer, marketer and seller of over-the-counter drugs and personal care products, and Industrias Bachoco, a poultry producer that operates chicken farms and processing units. Allocation effects, which are residual to the stock selection process, were negative given an overweight exposure to Consumer Discretionary. During the period, positions were initiated in Controladora Veula and Gruma. No positions were sold. Outlook Mexico is considered a developing economy with solid fundamentals and it has defensive characteristics given its oligopolistic structure, providing price power to leading companies. The country benefits from a demographic bonus given its young population. Private consumption, though more subdued, and industrial trade should continue to support Mexicos growth.