| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 68.35 | 415 |
| Intrinsic value (DCF) | 15.74 | 19 |
| Graham-Dodd Method | 5.51 | -59 |
| Graham Formula | n/a |
Mexico Equity & Income Fund Inc. (NYSE: MXE) is a closed-end balanced mutual fund specializing in Mexican fixed income and public equity markets. Managed by Pichardo Asset Management, S.A. de C.V., the fund targets diversified sectors within Mexico, including convertible securities, and benchmarks its performance against the Mexbol and MSCI Mexico Index. Established in 1990 and domiciled in the U.S., MXE provides investors exposure to Mexico’s dynamic economy, blending income generation through fixed income with growth potential via equities. The fund’s strategy appeals to those seeking regional diversification in Latin America’s second-largest economy, leveraging Mexico’s industrial, financial, and consumer sectors. With a market cap of ~$43M, MXE remains a niche player in the asset management space, catering to income-focused investors with a dividend yield of ~0.3%. Its performance is closely tied to Mexico’s macroeconomic trends, including interest rates and equity market volatility.
MXE presents a high-risk, niche investment opportunity tied to Mexico’s economic performance. The fund’s negative revenue and net income in recent filings (-$6.1M and -$6.7M, respectively) and diluted EPS of -$1.52 raise concerns about short-term profitability. However, its low beta (0.793) suggests relative resilience to broader market swings, and its dividend yield (~0.3%) may attract income-focused investors. The lack of leverage (zero total debt) is a positive, but the fund’s small size (~$43M market cap) and reliance on Mexican markets expose it to currency, political, and liquidity risks. Investors should weigh Mexico’s growth potential against MXE’s operational challenges and sector-specific volatility.
MXE’s competitive edge lies in its specialized focus on Mexican markets, offering U.S. investors targeted exposure to a region often underrepresented in global portfolios. Unlike broader Latin America funds, MXE’s dual equity-income strategy provides diversification within Mexico’s economy. However, its small scale limits economies of scale in management fees and liquidity. The fund’s performance is heavily dependent on Pichardo Asset Management’s local expertise, which may be a differentiator against global asset managers with less Mexico-specific knowledge. MXE’s benchmark alignment (Mexbol and MSCI Mexico) ensures transparency but also highlights its passive-like active management approach. Competitors with larger AUM may offer lower expense ratios or more diversified Latin America exposure, diluting MXE’s appeal. The fund’s closed-end structure could lead to discounts/premiums to NAV, adding another layer of risk/return variability.