Unemployment, Research & Development, and ETFs

Welcome to Latinometrics. We bring you Latin American insights and trends through concise, thought-provoking data visualizations.

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Today's charts:

1. Mexico as a stock investment (in collaboration with Bloomberg Linea)

2. The two unemployment extremes (story by Cesar Villescas)

3. Does spending more on R&D lead to better outcomes? (story by Gabriel Cohen)

Make sure you check out the comment of the week at the bottom!

Stonks 📈

Mexico Starts 2023 as a Top-Performing Country ETF

ETFs from Mexico, Brazil and Chile are performing strongly in 2023.

Investment opportunities abound these days and they can be as diverse as everything under the sun. One of them is investing in luxury watches. True: prices for those Rolex, Patek and Audemars Piguet pieces have appreciated by some 20% since mid-2018, as reported by Bloomberg News. That’s more than the S&P 500 Index, with annual returns of 8% from August 2018 to January 2023.

However, that investment could be seen as risky by some seasoned investors. Then, there’s another possibility in the ETF arena. Turns out, ETFs from Mexico, Brazil and Chile are among the top performers in the BlackRock iShares MSCI index, which track almost 40 countries, including the world’s most developed economies.

BlackRock's ETF on Mexico ($EWW) has been the company’s best-performing developing market ETF so far in 2023 (and #2 overall), with an 8.4% return as of March 17.

This ETF tracks a broad range of Mexican companies that represent a big chunk of Mexican equities. Some of its top holdings include America Movil, Walmart Mexico, Banorte and Femsa. In other words, it’s an easy way to get exposure in the country’s businesses.

One of the main reasons behind EWW's performance this year is the recovery of the Mexican economy from the pandemic-induced recession. According to the latest data, Mexico's GDP grew by 3.1% in 2022. The growth was driven by:

• Robust domestic demand

• Higher exports to the US and Canada under the USMCA trade agreement

• Signs of increased **foreign direct investment** and near-shoring

• A strong peso, and lowering inflation.

For investors willing to take some calculated risks, Mexico as an investment might be an ideal option. The country’s future looks promising, with a young population that is increasingly educated and engaged in entrepreneurship, and a dynamic culture. On top of that, its geography makes it a gateway to both North and South America.

Note: this story, written by Alejandro Ángeles, was published in collaboration with Bloomberg Línea.

Labor Market 👷

Compared to OECD Countries, Mexico's Unemployment Rate is Surprisingly Low

Latin American countries can be polar opposites regarding employment opportunities (or the lack thereof).