Mexico ETF Slumps Most in Six Months as Tariff Jab Hurts Stocks

(Bloomberg) -- The largest U.S. exchange-traded fund tracking Mexican companies saw heavy trading on Friday as investors reacted to the possibility of new tariffs on goods from the country.

The $816 million iShares MSCI Mexico ETF, or EWW, slumped as much as 5.4% in New York, the most since Nov. 26, before paring losses, data compiled by Bloomberg show. More than 75,000 shares worth about $3.4 million traded before markets even opened, the most in six weeks.

Investors were jolted Thursday night when President Donald Trump vowed to impose new duties on all Mexican products next month. The move would hit imports from the nation with a 5% duty on June 10 unless Mexico cracks down on migrants making their way through the country to the U.S., Trump said by tweet. The charges would rise incrementally to 25% by October.

“Mexican goods are things that the consumers would feel immediately -- you’re talking about food products, agricultural, electronics, cars,” Steve Chiavarone, a portfolio manager with Federated Investors, said in an interview at Bloomberg’s New York headquarters. “All of this was done pretty suddenly.”

EWW, which is poised for its worst month of outflows since September 2016, owns companies including America Movil SAB de CV and Wal-Mart de Mexico SAB de CV.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rachel Evans, Andrew Dunn

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