According to Forbes magazine, Mexico has become number one in the portfolios of some of the world’s largest investment firms. And for good reason. Large cap Mexican equities have risen a whopping 17.5 percent this year, which is nearly double the S&P 500’s performance of just 9.49 percent year-to-date.

In fact, Mexico’s economy is doing very well overall, thanks in part to its close ties with the growing U.S. economy. Also, the newly elected PRI party in Mexico is reportedly viewed as “more pro-growth,” which is expected to give a boost to the private sector. Add to all of this the fact that wages are steadily increasing in China, while remaining flat in Mexico, and it’s easy to see why Mexico real estate continues to grow in its appeal. 

And just a few weeks ago, Nomura Securities predicted that Mexico would soon surpass Brazil to become the largest economy in Latin America. 

“Mexico is currently the 12th largest economy in the world. Brazil is around No. 6,” writes Kenneth Rapoza of Forbes. “Mexico’s GDP last year was $1.65 trillion, up from $1.59 trillion in 2010 and $1.51 trillion in 2009. By comparison, Brazil’s GDP in 2011 was $2.2 trillion.”

Furthermore, Mexico’s currency is also expected to strengthen along with its economy. A stronger peso is expected to provide some of Mexico’s major corporations in their efforts to engage in acquisitions and joint ventures abroad. 

“Mexico is not some flavor-of-the-month economy,” stated Heiner Skaliks, fund manager for the Strategic Latin America Fund (SLTAX). “One of the things we like about Mexico is that you can get big, liquid names that have a significant portion of their revenue stream from other parts of the world. Coca Cola’s subsidiary is listed in Mexico and 60 percent of their revenues come from South America. A lot of the companies are multinational in nature.”