Mexican Investments

Is anyone invested in the Mexican stock market? If so, what have the returns been like over the past year or so. I am most interested in hearing about dividend paying funds and stocks.

The system isn't like the US, I have some funds and seem to pay taxes if they rise but not get any credit if they go down, and at the end of the year there is a net loss, I've still paid taxes even if I haven't sold anything!

In Canada I pay taxes on the dividends that are paid out to me but not on the rise in fund value. I imagine I would pay taxes on that if/when I cash out on the funds (although I have never cashed any out so I'm not 100% sure). We get some pretty substantial tax credits on these sorts of investments so in the end you don't pay much. You can't claim the losses against your Mexican income?

Nothing was sold so there is no "loss" but if the fund rises in value they tax me. Something fishy is going on. In the US I only am taxed on dividend distribution or if I sell and then I'll only pay when filing taxes if there is a net profit / gain.

If nothing is sold then there is no "gain" either. You should look into that as I have a hard time imagining they could attract any investors with that system. Perhaps your "fund manager" is charging you something and it's not actually taxes?

It is listed as taxes paid. Mexico has a screwy system, that is why only a small fraction of my money is there.

The Brazilian market might be worth a look.........

I used to have EWW and it usually did well and pays dividends

http://finance.yahoo.com/q?s=EWW

Intercasa wrote:Nothing was sold so there is no "loss" but if the fund rises in value they tax me. Something fishy is going on. In the US I only am taxed on dividend distribution or if I sell and then I'll only pay when filing taxes if there is a net profit / gain.

The exact same thing happens in the US. If you're in a fund, and the fund is buying and selling stocks within the portfolio, the taxes on the capital gains are passed on to the shareholder. Even if the fund loses money in a given year, the taxes on capital gains have to be paid for the stocks sold at a gain.

There's nothing "fishy" going on at all.

Thanks for clarifying Ajijic10. I have never seen any tax withdrawals on my fund statements in Canada so perhaps it is different here.

CanuckBob wrote:Thanks for clarifying Ajijic10. I have never seen any tax withdrawals on my fund statements in Canada so perhaps it is different here.

Sorry, I didn't mean to imply that the funds are taken out of the account in the US. They're not. You pay any tax liabilities when you file with the IRS. I was just trying to point out that funds can decline in price and still have taxes due, owing to the nature of mutual funds in general. When fund managers sell securities at a gain, you, as the shareholder in the fund, are responsible for the tax liability, whether you've sold any shares or not.

The way around this problem is ETFs, exchange traded funds. They go up or down in stock price depending on performance over time. But no gain or loss is realized until the ETF stock is sold. It trades just like regular stocks.

Mainecoons wrote:The way around this problem is ETFs, exchange traded funds. They go up or down in stock price depending on performance over time. But no gain or loss is realized until the ETF stock is sold. It trades just like regular stocks.

Not quite true, ETF's do have capital gain distributions, but they are miniscule in comparison to actively managed funds. For example, the S&P 500 ETF had a .05% distribution several years ago when I owned it. (as a percentage of assets). Some managed funds turn over 100% (or greater) of their portfolio in a given year.