Pacific Investment Management Co.'s Bill Gross has a
well-documented affinity for Mexican debt and the
country's currency, the peso
With that sentiment being widely known throughout global bond
markets, that might be the reason more bullish comment from Gross
about the Mexican peso are not doing much today to lift
that are heavy on Mexican bonds.
On Tuesday, Gross, founder of PIMCO, took to Twitter to praise
low debt levels and stability in its target
Peso fondness is nothing new from Gross. Last year, the bond
said investors should favor
"clean dirty shirt' sovereigns (U.S., Mexico and Brazil)."
Still, Gross reiterating his bullish view of the Mexican
currency is not doing much today to help those ETFs that feature
noticeable allocations to Mexican debt. Of that group, only the
Market Vectors LatAm Aggregate Bond ETF (NYSE:
) is trading higher today and only modestly so.
The unheralded BONO has a 14.5 percent weight to
peso-denominated Mexican sovereign debt. BONO has an average
modified duration of 5.89 years and a 30-day SEC yield of 4.71
The iShares Emerging Markets Local Currency Bond Fund (NYSE:
) is trading slightly lower today. That ETF features a 7.41
percent weight to peso-denominated bonds, but investors should
note South Korea and Brazil dominate this ETF, combing for 34
percent of its weight.
Those looking exposure to Mexican bonds without a full
regional commitment to Latin America can consider the WisdomTree
Emerging Markets Local Debt Fund (NYSE:
). ELD, the second-largest actively managed ETF on the market
today, allocates about 10.6 percent of its weight to
peso-denominated bonds making the peso the ETF's largest currency
holding. About 88 percent of ELD's holdings are rated
investment-grade. ELD is off a quarter of a percent today.
On above average turnover, the SPDR Barclays Emerging Markets
Local Bond ETF (NYSE:
) is lower by nearly 0.7 percent, making it Wednesday's worst
offender of the Mexico bond ETFs mentioned here. Mexico is EBND's
third-largest country at nearly nine percent, trailing Brazil and
South Korea could be the issue with EBND and LEMB today
because on Tuesday the country's Financial Supervisory Service
said foreign investors pulled $2.59 billion out of the country's
financial markets last month, the highest level since December
For more on ETFs, click
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