Stock Analysis & Valuation The Mexico Fund, Inc. (MXF)

• Previous Close: $21.43
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	28.31	32
Intrinsic value (DCF)	10.58	-51
Graham-Dodd Method	15.25	-29
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

The Mexico Fund, Inc. (NYSE: MXF) is a closed-end equity mutual fund focused on investing in Mexico's public equity markets. Launched in 1981 and managed by Impulsora del Fondo México, S.C., the fund provides U.S. investors with exposure to diversified sectors within the Mexican economy. As one of the few dedicated Mexico-focused investment vehicles listed on the New York Stock Exchange, MXF offers a unique opportunity to capitalize on Mexico's economic growth, industrial diversification, and emerging market potential. The fund's portfolio spans key industries such as financial services, consumer goods, industrials, and materials, aligning with Mexico's role as a major Latin American economy and a strategic trade partner with the U.S. With a long-standing track record, MXF serves as a gateway for investors seeking regional diversification and exposure to Mexican equities without direct stock market access.

Investment Summary

The Mexico Fund presents a specialized investment opportunity for those bullish on Mexico's economic prospects, but it carries inherent risks tied to emerging market volatility, currency fluctuations, and sector concentration. The fund's negative net income and EPS in recent reporting periods highlight performance challenges, though its dividend yield (based on a $0.88 annual payout) may appeal to income-focused investors. With a beta of 0.907, MXF exhibits slightly lower volatility than the broader market, but its closed-end structure can lead to premiums/discounts to NAV. Investors should weigh Mexico's structural reforms and nearshoring trends against political risks and dependence on U.S. economic conditions.

Competitive Analysis

The Mexico Fund differentiates itself through its singular focus on Mexican equities, offering U.S. investors a rare pure-play vehicle for this market. Its competitive edge lies in local market expertise via its Mexico-based advisor and nearly 40-year operating history, providing entrenched access to corporate networks and IPOs. However, as a closed-end fund, it competes with broader Latin America ETFs (e.g., ILF) and Mexico-specific ETFs (like EWW) that offer lower fees and daily liquidity. MXF's active management could theoretically outperform passive benchmarks during market dislocations, but its expense ratio (not disclosed here) must justify any alpha generation. The fund's small $242M AUM limits economies of scale versus mega-asset managers, and its sector-agnostic approach contrasts with thematic funds targeting specific Mexican industries like manufacturing or consumer growth.

Major Competitors

• iShares MSCI Mexico ETF (EWW): The largest Mexico-focused ETF with ~$1.8B AUM, EWW provides lower-cost passive exposure to Mexican large-caps. Strengths include liquidity (avg. volume >1M shares/day) and a 0.50% expense ratio, but lacks MXF's potential for active outperformance. Tracks the MSCI Mexico IMI 25/50 Index.
• iShares Latin America 40 ETF (ILF): Offers diversified Latin America exposure (including ~25% Mexico weighting). Attractive for regional diversification with $800M+ AUM, but dilutes Mexico-specific bets. Lower fee (0.48%) than most active funds, though underweights mid/small-caps that MXF can target.
• Franklin FTSE Mexico ETF (FLMX): Passive ETF tracking FTSE Mexico Capped Index. Newer entrant (2017) with modest AUM (~$50M), but ultra-low 0.19% fee pressures active managers. Like EWW, lacks sector rotation capabilities that MXF's active approach theoretically enables.