First nearshoring-focused fund listed on the Mexican Stock Exchange

Nearshoring has reached the Mexican Stock Exchange (BMV) in the form of an exchange-traded fund (ETF) that offers investors exposure to around 70 North American companies and trusts considered “direct beneficiaries” of the growing business trend.

Aztlan Equity Management’s North America Nearshoring Stock Selection ETF is the first ETF accessible via the BMV that specifically seeks to take advantage of the nearshoring phenomenon.

It was first listed on the BMV on Monday via the Stock Exchange’s International Quotation System, which allows investors to invest in shares and ETFs listed offshore. The ETF — which had an opening price of 364 pesos (US $21.60) — has been traded on the New York Stock Exchange (NYSE) since Nov. 30.

The fund, identified by the ticker symbol NRSH, “seeks to invest in stocks that are based in North America, including the U.S.A, Mexico and Canada, and that have been identified by Aztlan as direct beneficiaries of the nearshoring phenomenon,” says Aztlan Equity Management, which has offices in the U.S. (McLean, Virgina), Mexico (Monterrey, Nuevo León) and Hong Kong.

It is comprised of companies and trusts that operate in sectors including real estate, ground transportation, air freight and logistics, transport infrastructure and marine transportation. Among the 70 or so companies and trusts that make up the ETF are TFI International, CSX Corporation, Canadian Pacific Kansas City and the Mexico-based real estate investment trusts Fibra Macquarie and Fibra Mty. The 30 best-performing companies in the pool selected by Aztlan contribute to the ETF share price at any given time.

“The new ETF marks a turning point in the sector of investment funds that are listed on the stock exchange. The investors who decide to invest in the NRSH ETF will have broad exposure to the nearshoring phenomenon in a single instrument,” said Alejandro Garza, Aztlan Equity Management’s founder.

A red train with grass in the foreground and a forest behind it
The fund includes the rail company Canadian Pacific Kansas City Ltd. along with other businesses that directly benefit from nearshoring. (Canadian Pacific Kansas City)

“There’s never been a fund integrating these three markets,” he said, referring to the U.S., Mexico and Canada, the three signatories to the USMCA free trade pact.

“That, and the fact that it’s the first nearshoring fund, also makes it a watershed,” Garza said after the ETF was listed on the NYSE last November.

Over half of the companies in the fund — 57% — are based in the United States, while 23% are in Mexico and 20% are in Canada.

In an interview with Bloomberg Línea, Garza said that US $10 million has been invested in Aztlan’s nearshoring ETF since it listed on the NYSE three months ago.

“We think that is a good performance [but] our objective is to get to $100 million by the end of the year,” he said.

Now that the ETF is accessible via the BMV, investing in the fund will be easier for Mexicans.

Mexico is already benefiting from the nearshoring trend, but foreign investment is expected to continue to increase in coming years as companies act on plans already announced and other foreign firms take the decision to establish a presence here due to the country’s proximity to the United States, competitive labor costs and other factors.

With reports from El Economista, Bloomberg Línea and Reforma 

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