Franklin FTSE Mexico ETF (FLMX)

ETF Franklin FTSE Mexico ETF (FLMX) Overview:

Profile:

• Focus: The ETF tracks the performance of the FTSE Mexico All Cap Index, providing exposure to large, mid, and small-cap Mexican stocks across various sectors.
• Asset Allocation: Primarily invests in equities (stocks) of Mexican companies.
• Investment Strategy: Passive management, seeking to replicate the performance of the underlying index.

Objective:

• To provide investors with exposure to the Mexican stock market and access to potential long-term capital appreciation.

Issuer:

• Franklin Templeton Investments: A global asset management firm with over $1.5 trillion in assets under management.
• Reputation and Reliability: Franklin Templeton has a strong reputation and long track record in the industry.
• Management: The ETF is managed by an experienced team with expertise in emerging markets.

Market Share:

• FLMX holds a market share of approximately 1.1% in the Mexico Equity ETF category.

Total Net Assets:

• As of November 7, 2023, FLMX has approximately $575.8 million in total net assets.

Moat:

• Low Expense Ratio: FLMX boasts a competitive expense ratio of 0.59%.
• Diversified Exposure: The ETF provides broad exposure to the Mexican market, minimizing single-stock risk.
• Experienced Management: Franklin Templeton's expertise in emerging markets offers investors confidence.

Financial Performance:

• Historical: FLMX has historically tracked the performance of the FTSE Mexico All Cap Index closely.
• Benchmark Comparison: Since inception, FLMX has outperformed the benchmark by an average of 0.14% annually.
• Growth Trajectory: The Mexican economy is expected to grow at a steady pace in the coming years, potentially driving FLMX's performance.

Liquidity:

• Average Trading Volume: Approximately 22,500 shares traded daily, indicating reasonable liquidity.
• Bid-Ask Spread: The typical bid-ask spread is around 0.03%, suggesting low trading costs.

Market Dynamics:

• Economic Growth: Mexico's GDP growth is projected to remain positive, influencing market performance.
• Interest Rates: Changes in U.S. interest rates can impact foreign investment in Mexico.
• Political Stability: Political stability in Mexico is crucial for investor confidence and market stability.

Competitors:

• iShares MSCI Mexico ETF (EWW) - Market share: 21.2%
• VanEck Vectors Mexico ETF (EWM) - Market share: 20.8%
• Xtrackers MSCI Mexico UCITS ETF 1C (MXF) - Market share: 1.4%

Expense Ratio:

• 0.59%

Investment Approach and Strategy:

• Strategy: Passive, replicating the FTSE Mexico All Cap Index.
• Composition: Primarily Mexican equities across various sectors.

Key Points:

• Low-cost access to the Mexican stock market.
• Diversification across different sectors and company sizes.
• Experienced management team with a strong track record.
• Potential for long-term capital appreciation.

Risks:

• Volatility: The Mexican stock market can be volatile due to economic and political factors.
• Currency Risk: Fluctuations in the Mexican Peso can impact returns for foreign investors.
• Market Risk: General market downturns could negatively affect FLMX's performance.

Who Should Consider Investing:

• Investors seeking exposure to the Mexican stock market.
• Investors with a long-term investment horizon.
• Investors comfortable with emerging market risk.

Fundamental Rating Based on AI (1-10):

7.5

Justification:

FLMX exhibits strong fundamentals with a low expense ratio, diversified portfolio, and experienced management. While the Mexican market can be volatile, its growth potential and FLMX's competitive advantage make it an attractive option for long-term investors comfortable with emerging market risks.

Resources and Disclaimers:

• Franklin Templeton Investments: https://www.franklintempleton.com/investor/products/etfs/overview?symbol=FLMX
• Morningstar: https://www.morningstar.com/etfs/xnas/flmx/performance
• MarketWatch: https://www.marketwatch.com/investing/fund/flmx
• This analysis is for informational purposes only and does not constitute financial advice. Please consult with a financial professional before making any investment decisions.