With the final figures from the 2025 balance now in, there’s no doubt that last year marked a milestone in Mexico’s investment landscape: quite simply, it was the best year in the country’s modern history for investments in Mexican pesos.
From metals to real estate investments, and not to mention the strength of the local currency, Mexico’s investment market experienced a boom that surprised both insiders and observers alike, with the numbers making a compelling case.
According to data from Franklin Templeton México’s final report, the most profitable investment in the Mexican market during 2025 was gold, delivering a 43% return in pesos. This was driven by global political and tariff-related uncertainty, as well as a shift in global investors’ perception of the dollar as an effective “safe haven,” they noted.
Looking specifically at Mexican assets, the figures were equally remarkable for a period marked by high volatility. Fibras (real estate investment vehicles) posted a 38% return—something never seen before. Meanwhile, Mexican equities delivered an average return of 35%, boosted by the fact that the pessimistic scenarios forecast at the start of the year failed to materialize.
Fixed income also had an exceptional year. “Long-term Mexican government bonds were a surprise: Banxico’s aggressive rate cuts started to pay off, making Udibonos post their best year ever and MBonos their third-best year,” said Franklin Templeton strategists in their report.
Carry Trade, a Decisive Factor
While the fact that many negative scenarios did not play out was crucial to this historic investment year in Mexico, the presence of the carry trade phenomenon must also be highlighted as key to the recorded boom, since it’s not something that occurs at all times.
The dollar’s weakness, its worst performance on record against the Mexican peso, was a major driver of this arbitrage dynamic in Mexican markets. This weakness stemmed more from global performance in response to U.S. government tariff policies and geopolitical factors than from anything specific to the local economy.
This scenario favored strategies such as borrowing in Japanese yen at near-zero interest rates to invest in Mexican pesos at much higher yields, undoubtedly contributing to the peso’s continued appreciation.
What Lies Ahead for 2026
Analysts generally expect Mexican markets to continue on a positive path in 2026, though with less “explosive” results than those seen last year.
Moreover, the key challenges for the local economy are clearly outlined, with the renegotiation of the USMCA in the second half of the year posing the highest risk. According to Franklin Templeton analysts, “the proximity and historic economic integration between the United States and Mexico should outweigh political differences.”
They also expect the nearshoring narrative to regain momentum in 2026, benefiting industrial sectors listed on capital markets.
As for Mexico’s long-term debt, it is likely to continue offering attractive returns for patient investors, with rates that remain high both historically and compared to other investment-grade countries. However, short-term Mexican debt is expected to continue underperforming due to Banxico’s aggressive rate cuts and the increase in provisional income tax, according to the firm’s outlook.
