Description

The Mexico Fund, Inc. (the “Fund”) is a non-diversified closed-end management investment company with the investment objective of long-term capital appreciation through investments in securities, primarily equity, listed on the Mexican Stock Exchange. The Fund provides a vehicle to investors who wish to invest in Mexican companies through a managed non-diversified portfolio as part of their overall investment program. The Fund’s shares are listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “MXF.”

Managed Distribution Plan (“MDP”)

On June 8, 2020, the Fund announced that its Board of Directors (the “Board”) decided to temporarily suspend the Fund´s MDP. Global financial markets and overall economic activity have been severely affected by the “Covid-19” pandemic. Under this scenario of high uncertainty, the Board considered that it is in the best interest of Fund stockholders to temporarily suspend the Fund´s MDP in order to preserve capital. Nevertheless, the Board will continue to review the Fund´s MDP regularly in order to reinstate it as soon as deemed advisable by the Board. In addition, the Fund will continue to distribute to shareholders all of its net investment income and net realized capital gains, if any, at least annually, even while the Fund´s MDP remains suspended. The Fund’s Board of Directors may amend or terminate the MDP at any time without prior notice to stockholders. You should not draw any conclusions about the Fund’s investment performance from the amount of distributions or from the terms of the Fund’s MDP.

Highlights

These figures represent past performance. Past performance does not guarantee future results. The Fund's investment return and principal value will fluctuate so that an investor's shares, at the time of sale, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above.

1 Source: Impulsora del Fondo México, S.C. Performance figures take into account reinvestments of distributions.

2 Source: NYSE. Shares traded figure represents average volume traded on U.S. consolidated markets during the month.

3 During August 2020, the Fund repurchased no shares.

Holdings are subject to change and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities shown.

Fund Manager´s Comments

Most global equity markets continued to increase further during August 2020. The MSCI World Index and the MSCI Emerging Markets Index increased 6.5% and 2.1%, respectively, however, the MSCI Latam Index decreased 6.4%, led by a 9.0% decline in the Brazilian market. U.S. equity markets increased sharply during August 2020; the DJIA and the S&P 500 increased 7.6% and 7.0%, respectively, reaching all-time highs. The yield on the U.S. 10-year Treasury note increased 18 basis points to 0.70%, while the U.S. dollar closed at its lowest level since April 2018, as it depreciated 1.3% during the month (measured by the DXY Index⁴). The MSCI Mexico Index increased 1.0% during August 2020, driven by the Mexican peso’s appreciation of 1.8% to Ps. $21.89.

In local news, Mexico´s Central Bank decreased again its reference interest rate by 50 basis points to 4.50%, for a total reduction of 275 basis points so far this year. Official GDP for the second quarter decreased 18.7% on an annual basis, accumulating a decrease of 10.1% during the first six months of the current calendar year. Regarding Covid-19, cases and deaths increased to 599,560 and 64,414, respectively, while businesses have continued to open their activities. The Fund’s NAV outperformed its benchmark by 132 basis points during the month, accumulating an outperformance of 543 basis points during the current calendar year, as shown in the table above.

The information presented in this report has been derived from the sources indicated. Neither The Mexico Fund, Inc. nor its Adviser, Impulsora del Fondo México, S.C., has independently verified or confirmed the information presented herein.

An investment in the Fund entails special risk considerations, including among others the risks of foreign investments, Mexican investments, market illiquidity and volatility, market corrections, risks associated with the Mexican economy, political factors and security, currency exchange rate fluctuations, NAV discount risk, foreign custody risk, dollar denominated investments risk and risks associated with the concentration of the Mexican equity market. Investors should consider their investment goals, time horizons and risk tolerance before investing in the Fund. An investment in the Fund is not appropriate for all investors, and the Fund is not intended to be a complete investment program. Investors should carefully review and consider the Fund's investment objective, risks, charges and expenses before investing.