And Now This For Trump's Impact On The Mexico ETF...

Trying to put divisive party politics aside for a minute, leading up to the U.S. presidential election last month, it was widely believed a victory for Donald Trump would be a defeat of sorts for Mexican equities, the peso and the iShares MSCI Mexico Capped ETF EWW.

That theory has been validated. Sort of. Surprisingly, EWW, the largest exchange traded fund tracking Mexican stocks, is higher by 3.7 percent over the past month, an advantage of 100 basis points over the MSCI Emerging Markets Index. The recent run higher by EWW is not stopping some ratings agencies from expressing concern about Mexico, Latin America's second-largest economy behind Brazil.

Fitch Ratings was out with a bearish view on Mexico Friday.

The ratings agency “revised the Rating Outlook on Mexico's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to Negative from Stable and affirmed them at 'BBB+'. The issue ratings on Mexico's senior unsecured foreign- and local-currency bonds are also affirmed at 'BBB+'. The Country Ceiling is affirmed at 'A' and the Short-Term Foreign and Local Currency IDRs at 'F2',” said Fitch in a note. 

That after Fitch already waxed bearish on Mexican banks, a segment of particular importance to EWW, an ETF that devotes 20.6 percent of its weight to financial services stocks. 

While Mexico was widely cited as one of the emerging economies most vulnerable to a Trump victory, some market observers are highlighting specific areas of Mexico's equity market that could come under pressure if a Trump White House embarks upon significant changes in U.S. economic policy.

“Mexican banks would be among the most exposed in Latin America should any change in US economic policy under President elect Donald Trump significantly affect trade and growth within the region,” said Fitch Ratings in a recent note. “Over the short to medium term, the effects to Mexican banks would likely be partially contained by the banks' strong financial fundamentals. However, over the longer term, there could be downside potential for asset quality, loan growth and profitability if there is shift toward US protectionism.”

Give some investors credit for being bold and embracing EWW. The ETF has added nearly $684 million in new assets since Nov. 9, the day after Election Day. Still, Mexico's GDP growth is a concern.

“Mexico's modest growth profile is a rating weakness. Its five-year GDP growth average of 2.4% is weaker than the 'BBB' median of 3.1% and Fitch has cut its growth forecast for Mexico to below 2% for 2017, with downside risks continuing to persist. Fitch believes that domestic demand and economic growth will suffer from higher economic uncertainty reflecting doubts over possible NAFTA renegotiation and U.S. immigration policies, the volatility of the peso, a continued fall in oil production, and economic policy tightening,” added Fitch.