ETF Watch: WisdomTree Debuts Ex-Mexico Fund

Today, WisdomTree is rolling out an ETF that will offer global exposure except for Mexico. Perhaps even more interestingly, the WisdomTree Global ex-Mexico Equity Fund (XMX) will track an index that selects and weights its components based on market capitalization, despite the fact that almost all of WisdomTree’s other equity ETFs are weighted by either dividends or earnings.

The new fund comes with an expense ratio of 0.30% and is listed on the NYSE Arca.

XMX’s underlying index requires that companies from developed markets, including the U.S., have market capitalizations of at least $100 million, while emerging markets are required to have at least $200 million in market capitalilzation. There are also minimum volume requirements, and individual sector weights are capped at 25% of the index.

Post-Election Hit

Mexico’s markets have been hit hard by the election of Donald Trump as the U.S. president, with the iShares MSCI Mexico Capped ETF (EWW) falling roughly 15% from Election Day through the end of January. As such, there are, no doubt, investors who want to avoid exposure to Mexico in their global investments.

However, there is likely another source of demand as well. WisdomTree has already cross-listed some 32 ETFs on the Mexico stock exchange, and if it does the same with XMX, there is likely to be interest from Mexican investors in a global fund that excludes domestic exposure.

“The WisdomTree Global ex-Mexico Equity Fund (XMX) is designed to provide global market-cap-weighted exposure, while removing Mexico and other country exposure restricted by the Mexican pension regulator, CONSAR,” WisdomTree said in a statement, noting that its self-indexing business model uniquely positions the firm to partner with institutional investors on customized solutions designed to address investor needs.

XMX is the first global ex-Mexico ETF to be listed in the U.S.

Contact Heather Bell at [email protected].