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

Total Net Assets (million)¹

$225.63

Daily Average Number of Shares Traded²

23,789

NAV per share¹

$15.04

Outstanding Shares³

15,005,224

$13.00

Expense Ratio (10/31/2020)

1.56%

Discount

 13.56%

Portfolio Turnover (10/31/2020)

19.76%

Cumulative

Annualized

1 Month

YTD

1 Year

3 Years

5 Years

10 Years

MXF Market Price

-4.83%

-4.83%

-6.46%

-3.82%

0.70%

0.06%

MXF NAV

-5.47%

-5.47%

-2.75%

-4.06%

0.10%

-0.15%

MSCI Mexico Index

-5.92%

-5.92%

-9.21%

-6.91%

-1.13%

-1.86%

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 América Móvil

13.99%  

  6 Cemex

4.56%

2 Grupo México

8.89%  

  7 Orbia Advance Corporation

4.04%

3 Grupo Financiero Banorte

7.55%  

  8 Alfa

4.00%

4 Fomento Económico Mexicano

6.62%  

  9 La Comer

3.61%

5 Wal-Mart de México

6.03%  

  10 Gruma

3.39%

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

During January 2021, global equity markets registered mixed returns. The MSCI World Index decreased 1.1% and the MSCI Emerging Markets Index increased 3.0%. In the United States, Joseph Biden officially took Presidential office on January 20, 2021, while the Federal Reserve maintained unchanged its target interest rate at a range of between 0.00% and 0.25% and announced that it will continue to purchase government securities at the current pace. During the month, the DJIA and the S&P 500 decreased 2.0% and 1.1%, respectively, the 10-year Treasury note increased 15 basis points to 1.07% and the U.S. dollar appreciated 0.7% (measured by the DXY Index⁴). During January 2021, the MSCI Mexico Index decreased 5.9% and the Mexican peso depreciated 3.2% to Ps. $20.57, whereas the Fund’s NAV decreased 5.5%, outperforming its benchmark during the month and during all periods shown in the performance table of the prior page.

In local news, Mexico´s preliminary GDP⁵ for the fourth quarter of 2020 reported an annual decrease of 4.6%; however, it kept its sequential recovery, increasing 3.1% relative to the third quarter of 2020. Despite the challenging macroeconomic and global scenario, the Government maintained its strong fiscal position during 2020, recording a primary balance surplus of 0.1% of GDP.

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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.