Mexico: A New Gateway of Opportunity for Investment in the Emerging MarketsJune 11, 2013
New York Times Columnist Thomas Friedman declared earlier this year that Mexico will become a “more dominant economic power in the 21st century” than China. He noted how Richard Fisher, president of the Federal Reserve Bank of Dallas, argued that the Mexican economy’s vital signs look a lot healthier. “The U.S. deficit is 7 percent of gross domestic product,” said Fisher. “Mexico’s deficit is about 2 percent of their G.D.P.” Meanwhile, he added, America “is growing slowly, weighed down by debt and the pervasive uncertainty caused by our nation’s fiscal imbalances and growing regulatory complexity. Mexico, in contrast, is growing robustly, and, in contrast to their Washington counterparts, Mexican policy makers are demonstrating remarkable commitment to fiscal discipline.” The Financial Times also reported back in September that “today, Mexico exports more manufactured products than the rest of Latin America put together.” With this growing investor sentiment, the question that continues to be raised by followers of Capital Link’s Closed-End Fund Forums has been, how do international investors tap into this viable, attractive emerging economy without having to go through the tedious steps of investing in individual Mexican equities?
To answer this question, we sought after one of the leading experts of the Mexican Economy, who has their “finger on the pulse” of the Mexican Capital Markets with a tremendous track record of investment performance. We are delighted to be interviewing Ms. Maria Eugenia Pichardo, President and General Partner of Pichardo Asset Management (PAM), a position she has held since 2003. PAM is the Adviser to the Mexico Equity & Income Fund, listed on the New York Stock Exchange under the ticker “MXE.” Since the fund’s inception in 1990, Ms. Pichardo has been the Fund’s Portfolio Manager and in 2004, she was elected as the Fund’s President. Ms. Pichardo has more than 25 years of financial expertise, which includes serving as managing director of an investment bank and the portfolio manager of several funds.
Q: Thank you for joining us today. Can you give us a bit of background on Pichardo Asset Management and your role as Adviser to the Mexico Equity & Income Fund?
A: Pichardo Asset Management (PAM) was incorporated in 2003, and is an Independent Investment Advisory Firm, based in Mexico City, specializing in long-only equities. As a boutique firm with an extensive presence in Mexico, PAM brings 22 years of experience in the Mexican capital market, and is able to provide to investors a local perspective, as well as a dedicated, experienced independent portfolio manager. Our mission at PAM is to provide our clients with an independent advisory service that aims to maximize the returns of their investments in the Mexican stock market through ethical and responsible asset management, and by adhering to pre-established portfolio investment strategies based on our in-depth knowledge of the financial market. To achieve this mission, our vision is to continue to outperform the market benchmark and provide our clients with the highest return by offering a professional and unbiased Independent Advisor service, as well as, strengthen the academic qualities and experience of each member in our team.
As the founding Partner and President of The Board of Directors of PAM, I am responsible for the systematic factors of the investment strategies and equities percentage allocation, as well as risk management. Additionally, I am the President and Portfolio Manager of the Closed-End Fund listed on the NYSE, The Mexico Equity Income Fund, Inc. (MXE). Our team at PAM has had the privilege to advise MXE for 22 years since its inception in 1990. To give you a snapshot of MXE’s performance, let us take a comparison of the MXE and the MSCI Mexico- Index (the benchmark for all emerging markets) over the last three years. At an annual average, the MXE has outperformed the MSCI by 853 basis points and offered higher returns.