Franklin FTSE Mexico ETF

Franklin FTSE Mexico ETF (FLMX) is a Franklin Templeton index fund that tracks the FTSE Mexico RIC Capped Index, which held 35 large and mid-sized Mexican stocks as of May 31, 2026. Its 0.19% annual expense ratio is well below the 0.50% charged by the much larger iShares MSCI Mexico ETF (EWW), and about 88% of their holdings overlap. The trade-off is single-country risk and big price swings, including a 28.1% loss in 2024.

• Over the year to Oct 27, 2026, FLMX returned +17.2%, 4th of 5 among similar funds.
• Its 5-year annualized return was +12.2%.
• In the 2020 COVID crash it fell 46.1% and regained its old high 12.7 months after the low.
• Its worst full calendar year was 2024 (-28.5%); its best was 2025 (+53.7%).
• The deepest fall in its price history was 50.1% (Jan 26, 2018 to Mar 23, 2020), recovered by Aug 30, 2021.

As of Jun 30, 2026, the fund held 34 securities; the ten largest made up 64.85% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $3.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +2.14%, +3.03%, -2.69%.

FLMX tries to match the FTSE Mexico RIC Capped Index, before fees. FTSE Russell builds the index from large and mid-sized Mexican companies. To decide which companies count as Mexican, it looks at where each company is incorporated, listed and headquartered. Stocks are weighted by free-float market value, which means bigger companies count for more, but only shares the public can trade are counted. Every quarter, caps keep any single issuer at or below 25%, and the issuers above 5% can't add up to more than 50% combined.

Franklin Templeton can hold every index stock at its index weight, which is called replication. It can also hold a representative sample that behaves like the index. To put spare cash to work, the fund can use equity index futures and total return swaps, which are contracts that pay the return of an index. It can also use currency forwards to settle trades in pesos. Annual portfolio turnover was 21%.

Even with the caps, the fund is top-heavy. As of June 30, 2026, the largest holdings were Grupo Mexico (12.0%), Grupo Financiero Banorte (11.5%), FEMSA (8.5%), America Movil (7.7%) and Cemex (7.1%). The top 10 made up about 65% of the fund. As of May 31, 2026, the index was concentrated in consumer staples. If index weights shift, the fund could become "non-diversified" under federal fund law.

• FLMX charges 0.19% a year, versus an average of 0.49% for the similar funds below (1st of 5, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $19 in the first year and $241 over 10 years (assuming a 5% annual return).

It puts about 99.8% of its assets in a single emerging market, so it may add flavor around a broader core but carries heavy country and currency risk.

FLMX adds exposure to Mexico, whose economy depends heavily on trade with the US. Its declines have been steep. In the 2020 COVID crash it fell 46.1% from February 19 to March 23, 2020, and took about 12.7 months to recover. In 2022 it dropped 19.6% between April and September, then recovered in about 3.4 months. Its worst calendar year was 2024, down 28.1%. Its deepest drop was 50.1%, from January 2018 to March 2020, and it took 17.2 months after that low to recover. It launched in 2017, so it has no 2008 record. Anyone who has to sell during a slump could lock in losses like these. The trailing yield was 3.9% as of October 27, 2026, paid twice a year, and the fund costs 0.19% a year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.