Investors scrambling to find returns this year amid record lows for fixed-income assets have been heading south of the border.
According to a research note from Barings Asset Management, Mexican bond market offers the best-return potential in the emerging markets bond space.
"Mexican bonds stand to benefit from a growing economy with a currency that is now the cheapest it has been for nearly two decades, making capital appreciation likely," Christopher Mahon, Director of Asset Allocation Research at Barings said in the note.
The Mexican peso has been under-performing other emerging markets ever since the Republican presidential candidate Donald Trump started to talk about deportations, ditching trade deals and having Mexico to pay for a border wall.
"Donald Trump as U.S. President could be bad news for Mexico. Reasons include his plan to tax remittance payments to Mexico, and the potential withdrawal from The North American Free Trade Agreement. While it is far from given that Trump will win the White House, or be able to control Congress enough to implement his policies, his candidacy remains a risk for the peso," Mahon said.