[PPT] - Pichardo Asset Management Independent Portfolio Management Firm The PowerPoint Presentation

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Experience Consistency Vision

Pichardo Asset Management

Independent Portfolio Management Firm

The Mexico Equity and Income Fund Inc.

Material Presentation to Shareholders

December, 2017

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THE MEXICO EQUITY AND INCOME FUND, INC.

Quarterly Board of Directors’ Meeting December 07, 2017

Index

I. Summary ……………………………………………………………………………………………… 3-4 II. Review of the Mexican Economy …………………………………………………..………………... 5-22 III. The Composition of the Fund´s Portfolio: i. Investment Themes …………………………………………………………………….………. 23 ii. MXE´s Portfolio Upside Potential for the next 12 months & Forward Valuation ………… 24-26 iii. Overweight / Underweight by Sector & Industry …………………………………...…….. 27-28 iv. Diversified Active Management ……………………………………………….……….………. 29 IV. The Fund´s Performance ……………………………..……………………………….…………… 30-41 V. Definitions …………………………………………………………………………….…….………… 42 VI. Disclosures ………………………………………………………………………………..……….. 43-45

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World growth continued to trend higher in 3Q17. In Mexico, the risks to growth are

weighted towards the downside due to uncertainty associated with the NAFTA renegotiation, which has been keeping a temporary lid on investment and could be one of the reasons for consumption slack. Meanwhile the peso lost ground against the dollar during the month due to U.S. monetary policy normalization, uncertainty over NAFTA, and the White House bill on U.S. fiscal reform. In this context, monetary policy actions aimed at preserving macro fundamentals remain in place.

Given uncertainty over the NAFTA renegotiation and political noise related to the 2018

elections in Mexico, we have been disciplined with respect to fundamental analysis, focusing our strategies on value stocks with attractive discounts, high earnings growth potential and attractive next-12-month upside as calculated by PAM based

n

fundamentals that remain quite strong.

Experience Consistency Vision

I. Summary

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PAM’s disciplined adherence to maintaining positions in so-called discounted-oversold

stocks, has contributed to the Mexico Equity and Income Fund’s (Fund) Net Asset U.S. Dollar Value per share, “NAV,” registering a 14.68% return for the Fund’s year-to-date period ended November 30, 2017, according to U.S. Bancorp.

The Fund’s long-term investment strategy has continued to provide an excess dollar

annual return for the last five-years (476 bps per annum) and ten-year (100 bps per annum) periods, and since the Fund’s inception (212 bps per annum) in August 1990, through November 30, 2017 (with dividends reinvested) compared to the Mexican Bolsa Index’s return. Source: PAM; Bloomberg.

Our base-case scenario is that NAFTA will prevail. As local content accounts for 80% of all

Mexican exports to the U.S. and 42% would have to comply with World Trade Organization rules, the post-NAFTA tariff would be a relatively low 3% and would ultimately be passed on to US consumers. Indeed, the US industrial lobbyists have already raised concerns about being adversely impacted by NAFTA’s cancellation. Source: PAM; Bloomberg.

Experience Consistency Vision

I. Summary

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Experience Consistency Vision

II. Review of the Mexican Economy

Mexico vs. Developed Economies (G7)

58 53 50 100 150 200 250

General Government Gross Debt (% of GDP)

2016 2017 (Estimate)

Source: International Monetary Fund, World Economic Outlook Database (October 2017) % GDP

23
20
550
450
350
250
150
50

50 150 250

Current Account

2016

USD Billion Source: International Monetary Fund, World Economic Outlook Database (October 2017)

8.8x 5.5x 1.6x 1.5x 0.9x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x

Current Account Ratio1

(International Reserves/Current Account Balance) Source: International Monetary Fund, International Financial Statistics (October 2017)

2.9x 1.1x 0.8x 0.7x 0.6x 0.6x 0.6x 0.5x 0.2x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x

Debt Coverage Ratio (International Reserves/Government Gross Debt)

Source: International Monetary Fund, International Financial Statistics (October 2017)

1 Excluding countries: with surplus: Japan, Italy, Spain, and Germany

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Experience Consistency Vision

II. Review of the Mexican Economy

Mexico vs. Developed Economies (G7)

2.8% 5.9%

1%

0% 1% 2% 3% 4% 5% 6% 7%

Inflation

2016 2017 (Estimate)

% Inflation Source: International Monetary Fund, World Economic Outlook Database (October 2017)

7.00%

1.00%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%

Central Bank Rates

Source: Bloomberg

123 112 70 24 18 10 20 40 60 80 100 120 140

5 Year CDS USD

(Basis Points)

Source: Bloomberg

16.72%

7.67%

20.00%
15.00%
10.00%
5.00%

0.00% 5.00% 10.00% 15.00%

Currency Appreciation vs. USD

2016 YTD

Source: Bloomberg

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Experience Consistency Vision

II. Review of the Mexican Economy

232 253

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Foreign Direct Investment

2016 2017

Source: International Monetary Fund, International Financial Statistics USD Billion 6667

2,000 4,000 6,000 8,000 10,000 12,000

Foreign Portfolio Investment

2016 2017

Source: International Monetary Fund, International Financial Statistics USD Billion

23.2x 18.9x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x

Stock Market P/E

2016 YTD

Source: Bloomberg

16.2%

3.2%
5%

0% 5% 10% 15% 20% 25% 30% 35%

Stock Market Return vs. Currency Appreciation1

(2009-2017) Stork Market Return Currency Appreciation

Source: Bloomberg

1 Average Annual Holding Period Return/Appreciation

Mexico vs. Developed Economies (G7)

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Experience Consistency Vision

II. Review of the Mexican Economy

Mexico vs. LATAM Economies

1,047 1,142

500 1,000 1,500 2,000 2,500

Size of the Economy

2016 2017 (Estimate)

USD Billion Source: International Monetary Fund, World Economic Outlook Database (October 2017) 2.3% 2.1%

4.0%
3.0%
2.0%
1.0%

0.0% 1.0% 2.0% 3.0% 4.0%

Annual GDP Growth

2016 2017 (Estimate)

% Growth Source: International Monetary Fund, World Economic Outlook Database (October 2017) 8,562 9,249

1,000

1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000

Annual GDP per Capita

2016

USD Source: International Monetary Fund, World Economic Outlook Database (October 2017) 178 175

50 100 150 200 250 300 350 400 450

International Reserves

2016

USD Billion Source: International Monetary Fund, International Financial Statistics (October 2017)

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Experience Consistency Vision

II. Review of the Mexican Economy

GDP, Employment & Inflation

2015 2016 1Q '17 2Q '17 2013 2014 2015 2016 Average GDP 17,288 17,791 4,440 4,536 1.4% 2.8% 3.3% 2.9% 3.1% Private Consumption 11,418 11,836 2,942 3,000 1.8% 2.1% 3.4% 3.7% 2.7% Government Consumption 2,082 2,131 531 536 0.5% 2.9% 1.9% 2.4% 1.9% Investment 3,743 3,784 907 912

3.4%

3.1% 5.0% 1.1% 1.4% Exports 5,910 6,115 1,554 1,596 1.4% 7.0% 8.4% 3.5% 5.1% Imports

5,927
6,099
1,526
1,600

2.1% 5.9% 5.9% 2.9% 4.2%

*Constant Prices, Base 2013 Source: INEGI

GDP (Million MXN) Growth Rates

1Q '17 2Q '17 GDP 3.2% 1.9% Private Consumption 3.1% 3.2% Government Consumption 1.8% 0.0% Investment

0.1%
3.1%

Exports 9.0% 4.6% Imports 7.9% 5.3%

*Constant Prices, Base 2013 Source: INEGI

Growth Rate

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Experience Consistency Vision

II. Review of the Mexican Economy

GDP, Employment & Inflation

6.0%
4.0%
2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000

Insured IMSS Workers

YoY Total Insured Workers

Source: IMSS

3.60 3.00 3.50 4.00 4.50 5.00 5.50 6.00

Unemployment Rate (%)

Source: Bloomberg

5%

0% 5% 10% 15%

Same store sales (YoY)

Walmex 10.2% ANTAD 5.6%

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Experience Consistency Vision

II. Review of the Mexican Economy

GDP, Employment & Inflation

Bi-weekly Inflation (YoY % Change)

6.35% 4.80% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

Inflation (YoY % Change)

Consumer Inflation Core Consumer Inflation Banxico Target Producer Inflation

Source: INEGI

6.87%

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Experience Consistency Vision

II. Review of the Mexican Economy

Private Banking

5% 7% 9% 11% 13% 15% 17% $2,500 $3,000 $3,500 $4,000 $4,500

Current Loans

(Sep 2017)

YoY Current Loans

Source: Mexico's National Banking and Securities Commission MXN Billion

5% 7% 9% 11% 13% 15% 17% 19% $1,700 $1,900 $2,100 $2,300 $2,500 $2,700 $2,900 $3,100

Commercial Loans

(Sep 2017)

YoY Commercial

Source: Mexico's National Banking and Securities Commission MXN Billion

5% 10% 15% 20% 25% $400 $450 $500 $550 $600 $650 $700

Consumer Loans

(Sep 2017)

YoY Consumption

Source: Mexico's National Banking and Securities Commission MXN Billion

5% 7% 9% 11% 13% 15% $400 $450 $500 $550 $600 $650 $700

Housing Loans

(Sep 2017)

YoY

Source: Mexico's National Banking and Securities MX N Billio n

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Experience Consistency Vision

II. Review of the Mexican Economy

NAFTA & External Accounts Trade Patterns with the U.S. & External Accounts

Country Exports Imports Total Trade Balance Country Exports Imports Total Trade Balance China 97,067 373,603 470,670 -276,536 Taiwan 19,063 31,640 50,703.0

12,577

% of Total 8.4% 21.5% 16.3% % of Total 1.7% 1.8% 1.8%

Mexico 180,152 233,400 413,552

53,248

France 24,950 35,357 60,307

10,407

% of Total 15.7% 13.4% 14.3% % of Total 2.2% 2.0% 2.1%

Japan 50,081 101,748 151,829

51,667

Saudi Arabia 12,746 14,987 27,733

2,241

% of Total 4.4% 5.9% 5.3% % of Total 1.1% 0.9% 1.0%

Germany 39,456 87,695 127,151

48,239

United Kingdom 41,330 39,097 80,427 2,233

% of Total 3.4% 5.0% 4.4% % of Total 3.6% 2.3% 2.8%

Italy 13,450 36,013 49,463

22,563

Brazil 26,913 21,801 48,714 5,112

% of Total 1.2% 2.1% 1.7% % of Total 2.3% 1.3% 1.7%

Canada 210,393 223,494 433,887

13,101

Singapore 22,358 14,481 36,839 7,877

% of Total 18.3% 12.9% 15.0% % of Total 1.9% 0.8% 1.3%

India 19,246 35,739 54,985

16,493

Hong Kong 30,394 5,667 36,061 24,727

% of Total 1.7% 2.1% 1.9% % of Total 2.6% 0.3% 1.2%

Korea, South 36,128 52,758 88,886

16,630

All other countries 326,045 429,066 755,111 -103,021

% of Total 3.1% 3.0% 3.1% % of Total 28.4% 24.7% 26.2%

TOTAL 1,149,772 1,736,546 2,886,318 -586,774

United States International Trade (to Sep 2017)

Source: U.S. Census Bureau Amounts in millions of dollars

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Experience Consistency Vision

II. Review of the Mexican Economy

NAFTA Negotiations: Difficult Proposals The U.S. Trade Representative has pushed several controversial proposals:

Eliminating Chapter 19, the dispute mechanism that allows an independent panel to settle

issues around trade

Changing the rules of origin to increase the required percentage of content made locally, in
rder for products to maintain their tax exemptions
Setting limits on seasonal trade by establishing tariffs or quotas, in order to protect the US

agricultural sector

The “sunset clause”, which would cause the agreement to expire every five years unless all

three countries decide to continue

The call to tighten Mexico’s labor standards and change low wages and weak union rules

in order to balance labor conditions

Cancel the Investor-state Dispute Settlement (ISDS), which allows investors of one NAFTA

party to bring claims directly against the government of another NAFTA party before an international arbitral tribunal.

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Experience Consistency Vision

II. Review of the Mexican Economy

NAFTA “Plan B” Considerations The first option is “Plan A”, which is to maintain NAFTA

“Plan B” must be activated only if the U.S. decides to leave the negotiating table.
It is important to distinguish the real intention from negotiating tactics.
The pro-NAFTA forces in the U.S. can be activated to put pressure on the U.S. government
Mexico already has a contingency plan in place that includes the following:

 A communication strategy aimed at financial markets and the general public.  Options for strategic supplies that have already been negotiated  Identification of products exportable to the U.S. that would not be affected by new tariffs or quotas.  New possible destinations for Mexican exports.  Schemes to provide guarantees to foreign investors, such as insurance provided by several institutions.  Emergency stabilization schemes in the event of an overreaction in financial markets.  Compensation from non commercial operations, such as remittances.

A strategy for non-commercial matters with the U.S., such as security, border control, and

immigration.

Reinforcement of multilateral commercial frameworks (TPP, WTO, etc.)

Source: Enrique Quintana; El Financiero.

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Experience Consistency Vision

II. Review of the Mexican Economy

NAFTA and Political Times

Mexico Federal Elections Jul 1 2018 Inauguration of Mexico’s New President Dec 1 2018 Canada’s Federal Elections Oct 1 2019 Negotiations Begin Aug 16 U.S. Midterm Elections, Jul 6 2018 Public hearings in Washington Jun 27 - 29 USTR releases Objectives for negotiation Jul 16

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Experience Consistency Vision

II. Review of the Mexican Economy

Exchange Rate, Interest Rates & the Stock Market

15.26 17.20 16.52 19.15 18.06 19.88 18.52 20.85

17.49 21.96 14.00 15.00 16.00 17.00 18.00 19.00 20.00 21.00 22.00

MXN/USD Spot Exchange Rate

Source: Bloomberg

18.97

November 17, 2017

20.3%

5.3% 12.4% 15.9% 12.7% 10.1% 8.5%

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Experience Consistency Vision

II. Review of the Mexican Economy

Exchange Rate, Interest Rates & the Stock Market

19.58 19.62 19.69 19.90 19.09 20.21 19.2419.34 20.49

17.0 17.5 18.0 18.5 19.0 19.5 20.0 20.5 21.0 21.5 22.0

Banxico’s Exchange Rate Futures Contracts Program

(As of November 17, 2017)

MXN/USD Weighted Exchange Rate

Source: Bloomberg, Banxico

18.97

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Experience Consistency Vision

II. Review of the Mexican Economy

Exchange Rate, Interest Rates & the Stock Market

1 2 3 4 5 6 7 8 9

Interest Rates

U.S. Federal Funds Rate (Upper Bound) Banxico Official Overnight Rate

Source: Bloomberg, Banxico Survey of Expectations

Maximum Spread:

800 bps

Current Spread: 575 bps

7.00 1.25

Projections

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Experience Consistency Vision

II. Review of the Mexican Economy

Exchange Rate, Interest Rates & the Stock Market

15%
10%
5%

0% 5% 10% 15% 20%

22 24 26 28 30 32

6M 12M Adjusted PE Mean Mean + Std. Dev Mean - Std. Dev

MEXBOL P/E vs 6-M FWD Price Change

(As of November 17, 2017)

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Experience Consistency Vision

II. Review of the Mexican Economy

Political Relevant Events 2017 - 2018 Timeline: Politics

PRI General Assembly Aug 5 - 12 Official Start of Electoral Process Sep 8 Coalition Registration Deadline Dec 31 Federal Elections Jul 1 2018 PAN establishes Commission for Electoral Process Aug 9 PRD elects local & national leadership Aug 6 Inauguration Dec 1 2018 “Wide Front” Coalition Announced Sep 9 Registration Deadline for Independents Oct 14 Pre-campaigns Dec 14 – Feb 11 Campaigns Mar 30 – Jun 27 Electoral “Silence” Jun 28 –Jul 1

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Experience Consistency Vision

II. Review of the Mexican Economy

Electoral Preferences 2018

Source: Consulta Mitofsky

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23 23 23

Experience Consistency Vision

Source: PAM, Bloomberg

Total Value of the Portfolio by Investment Themes (%) As of October 31, 2017

III. MXE Portfolio Composition

High-Growth 53.2 Special Situation 18.7 Total Annual Return 11.4 Cash & Ready Available Instruments 8.9 Energy Reform 5.9 Private Equity 1.9

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24 24 24

Experience Consistency Vision

Source: PAM, Bloomberg

Total Value of the Portfolio Classified by PAM Estimate Upside Potential Return for the Next 12 Months (%) As of October 31, 2017

III. MXE Portfolio Composition

Upside Potential >40% 11 Upside Potential 30-40% 19 Upside Potential 20-30% 22 Upside Potential 15-20% 11 Upside Potential <15% 11 US Dollar Revenues 14 Cash & Ready Available Instruments 9 Private Equity 2

% Allocation in the Portfolio

SLIDE 25

Source: PAM, Bloomberg.

MXE Portfolio’s Estimated Weighted Average Upside Potential for the Next 12 Months Compared to the Mexican Bolsa Index, according to Pichardo Asset Management (%) As of October 31, 2017

25

Experience Consistency Vision

III. MXE Portfolio Composition

24.6 18.6 1.9 2.4

MXE´s Portfolio Mexican Bolsa Index Total Portfolio / Index Dividend Yield Total Investment Return 26.5 Total Investment Return 21.0

SLIDE 26

Source: PAM, Bloomberg.

Forward 12M Valuation of the MXE Portfolio compared to the Mexican Bolsa Index As of October 31, 2017

26

Experience Consistency Vision

III. MXE Portfolio Composition

13.6x 6.5x 16.1x 8.2x P/E EV/EBITDA MXE´s Portfolio Mexican Bolsa Index

15% Discount 20% Discount

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27 27 27

Experience Consistency Vision

Source: PAM, Bloomberg

Overweight / Underweight by Sector of the MXE´s Portfolio Compared to the Mexican Bolsa Index in basis points As of October 31, 2017

III. MXE Portfolio Composition

560 420 125 67 50 Industrials Utilities Real Estate Consumer Discretionary Financials

552
619
1,129

Materials Consumer Staples Telecommunication Services

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28 28 28

Experience Consistency Vision

Source: PAM, Bloomberg

Overweight / Underweight by Industry of the MXE´s Portfolio Compared to the Mexican Bolsa Index in basis points As of October 31, 2017

III. MXE Portfolio Construction

420 385 381 271 265 262 231 178 68 Gas Utilities Industrial Conglomerates Real Estate Management & Development Chemicals Multiline Retail Hotels, Restaurants & Leisure Auto Components Airlines Consumer Finance

3
18
30
148
172
256
269
355
468
691
1129

Transportation Infrastructure Banks Food Products Beverages Household Products Real Estate Investment Trust Food & Staples Retailing Construction Materials Metals & Mining Media Wireless Telecommunication

SLIDE 29

Source: PAM, Bloomberg.

29

Experience Consistency Vision

Diversified Active Management (%) One-Year to October 31, 2017

High Concentration High Diversification

III. MXE Portfolio Composition

*N12M: Next Twelve Months

Issuer Weight One-Year Return PAM Upside Potential N12M Issuer Weight One-Year Return PAM Upside Potential N12M FEMSAUBD 8.1

9.0

17.0 AMXL 17.2 30.2 6.9 GFNORTEO 6.2 0.8 35.6 FEMSAUBD 10.8

9.0

17.0 IENOVA* 5.9 15.3 15.4 GFNORTEO 9.5 0.8 35.6 AMXL 5.8 30.2 6.9 CEMEXCPO 7.5

6.1

28.6 ALFAA 5.5

31.1

21.2 WALMEX* 7.1 5.6 6.3 GRUMAB 4.3

5.6

23.1 GMEXICOB 7.1 32.0 16.2 MEXCHEM* 4.3 7.7 30.6 TLEVICPO 6.9

11.0

6.7 PINFRA* 4.2

15.1

27.0 FUNO11 2.6

17.5

26.3 AC* 4.2 2.3 33.0 OMAB 2.4

13.3

25.6 GMEXICOB 4.1 32.0 16.2 ALFAA 2.4

31.1

21.2 MXE´s Portfolio 52.6

3.5

11.6 Mexican Bolsa Index TOP TEN 73.4 2.4 12.4 Mexican Bolsa Index TOP TEN MXE´s Portfolio TOP TEN

SLIDE 30

30 30 30

Experience Consistency Vision

Source: US Bancorp1; Thomson2; PAM3; Bloomberg.

The MXE’s Net U.S. Dollar Asset Value per Share Return with Dividends Reinvested

IV. The Fund’s Performance

Performance data represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that the investor’s shares, when sold may be worth more or less than their

riginal cost. Performance data to the most recent month end may be obtained by calling U.S. Bancorp Fund Services, LLC,

(414)765-4255, or by consulting the Fund’s web page: www.mxefund.com.

Fund 1 Month Y-T-D 1 Year 3 Years 5 Years 10 Years Since Inception in 8/30/90 MXE NAV

1.33% 1 14.68% 1 13.29% 1

5.82% 1

1.55% 1 1.88% 1 11.85% 2

MXE NAV Return in Mexican Pesos

1.91% 3

3.11% 3 2.60% 3 3.81% 3 9.25% 3 7.47% 3 19.78% 3

MXE Market Price

0.86% 1 15.27% 1 13.90% 1

7.38% 1

1.87% 1 3.10% 1 12.16% 2

MXN Appreciation/Depreciation

3.30% 3 11.23% 3 10.41% 3

9.28% 3
7.04% 3
5.20% 3
6.62% 3

MEXBOL Index

0.38%

16.21% 16.36%

5.70%
3.21%

0.88% 9.73%

MXF NAV

0.72% 16.11% 15.18%

4.88%
1.92%

0.78% 8.26%

MXF Market Price

0.44%

8.33% 14.26%

8.04%
3.17%

1.93% 8.83%

MXE NAV Excess Return vs. Mexbol Index in Basis points

171

153
307
12

476 100 212

Cummulative to November 30, 2017 Y-T-D 1 Year 3 Years 5 Years 10 Years Since Inception in 8/30/90 Discount to NAV, as of November 30, 2017. MXE Common Share Market Price

15.27% 1 13.90% 1

20.54% 1

9.70% 1 35.71% 1 2180.75% 3

13.29%

MXF Common Share Market Price

8.33% 14.26%

22.23%
14.86%

21.09% 903.74%

13.18%

As of November 30, 2017 Total Annual Average US Dollar Return through November 30, 2017 (dividends reinvested)

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Experience Consistency Vision

Source: PAM, Bloomberg.

Excess Return of the MXE Portfolio vs. the Mexican Bolsa Index in Mexican Pesos Monthly 12-Month Spread Performance in basis points

IV. The Fund’s Performance

* Monthly return of the last 12-months

696

374

153 602 511 934

753
551
858
489
330
1,200
900
600
300

300 600 900 1,200

NAFTA Conceptual Speculation

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32

Experience Consistency Vision

Source: PAM, Bloomberg.

Excess Return of MXE´s Portfolio vs. Mexican Bolsa Index in USD Monthly 12-Month Spread Performance in basis points

IV. The Fund’s Performance

* Monthly return of the last 12-months

664.18

310

121 497 783

720
527
1005
523
307
1200
1000
800
600
400
200

200 400 600 800 1000

NAFTA Conceptual Speculation

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33

14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%

0.0% 2.0% 4.0% 6.0% 8.0%

MXE

(Daily Returns)

MXE Mean

Std. Dev: 1.24%
10.0%
8.0%
6.0%
4.0%
2.0%

0.0% 2.0% 4.0% 6.0% 8.0%

Mexican Bolsa Index

(Daily Returns)

Std. Dev: 1.26%

Source: PAM, Bloomberg.

Volatility Risk: MXE vs. Mexican Bolsa Index 5 years

IV. The Fund’s Performance

Experience Consistency Vision

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34

Source: PAM, Bloomberg.

Volatility Risk: MXE vs. Mexican Bolsa Index 3 years

IV. The Fund’s Performance
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%

0.0% 2.0% 4.0% 6.0% Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17

MXE

(Daily Returns)

MXE Mean

Std. Dev: 1.33%
10.0%
8.0%
6.0%
4.0%
2.0%

0.0% 2.0% 4.0% 6.0% 8.0% Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17

Mexican Bolsa Index

(Daily Returns)

Std. Dev: 1.35%

Experience Consistency Vision

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35

Source: PAM, Bloomberg.

Volatility Risk: MXE vs. Mexican Bolsa Index 1 years

IV. The Fund’s Performance
3.0%
2.0%
1.0%

0.0% 1.0% 2.0% 3.0% 4.0% Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17

MXE

(Daily Returns)

MXE Mean

Std. Dev: 1.06%
4.0%
3.0%
2.0%
1.0%

0.0% 1.0% 2.0% 3.0% 4.0% Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17

Mexican Bolsa Index

(Daily Returns)

Std. Dev: 0.96%

Experience Consistency Vision

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Source: PAM, Bloomberg.

IV. The Fund’s Performance

MXE’s Return – Risk Adjusted (Jensen’s Alpha)

Jensen’s Alpha is a measure of the return on a portfolio over what the capital asset pricing

model predicts, given the beta and market return on that portfolio. The index also adjusts for risk.

MXE's Risk Adjusted Return as of November 30, 2017

Funds Data One Month Y-T-D One Year Three Year Five Year Ten Year MXE's Return 1.33% 14.68% 13.29%

5.82%

1.55% 1.88% MXE β 0.958 0.958 0.958 0.935 0.914 0.914 Risk Free Rate 7.00% 6.70% 6.63% 4.57% 4.20% 4.78% MEXBOL's Return

0.38%

16.21% 16.36%

5.70%
3.21%

0.88% MXE's ALPHA vs MEXBOL Index 1.40%

1.14%
2.66%
0.78%

4.12% 0.67%

Experience Consistency Vision

SLIDE 37

37

Source: PAM, Bloomberg.

IV. The Fund’s Performance

MXE’s Return – Risk Analysis (One Year to November 30, 2017)

Excess Return Jensen’s Alpha

One Year Return Risk Free Rate Excess Return MXE MEXBOL 13.29% 16.36% 6.63%

307

Attribution Breakdown

MXE’s Return 13.29% MXE β 0.958 Risk Free Rate 6.63% MEXBOL Return 16.36% MXE’s Alpha

2.66%

MEXBOL Return in MXN 5.90% MXN Appreciation 10.41% PAM’s Contributed Value

3.02%

MXE’s Return 13.29% Experience Consistency Vision

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Experience Consistency Vision

Source: PAM, Bloomberg

MXE’s Fund Relative Contribution by Sectors One-Year to October 31, 2017

IV. The Fund’s Performance

Sector Absolute Relative OW /UW (basis points) Real Estate

0.11%

0.89% 125 Consumer Staples

0.21%

0.73%

619

Consumer Discretionary

1.09%

0.36% 67 Utilities

0.04%
0.30%

420 Financials

0.65%
0.98%

50 Telecommunication Services 3.33%

1.29%
1,129

Industrials

2.93%
1.77%

560 Materials 0.46%

1.77%
552

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Experience Consistency Vision

Source: PAM, Bloomberg

MXE’s Relative Contribution by Industry One-Year to October 31, 2017

IV. The Fund’s Performance

Industry Absolute Relative OW /UW (basis points) Equity Real Estate Investment 0.62% 1.63% 183 Media

0.07%

0.89%

691

Food Products

0.04%

0.70% 121 Diversified Telecommunication 0.54% 0.54% Household Products

0.12%

0.28%

172

Construction Materials 0.11% 0.16%

355

Transportation Infrastructure 0.11% 0.13%

3

Hotels, Restaurants & Leisure

0.01%
0.01%

Multiline Retail

0.54%
0.05%

265 Pharmaceuticals

0.11%
0.11%

381 Gas Utilities

0.08%
0.34%

97 Consumer Finance

0.82%
0.34%

68 Auto Components

0.40%
0.40%

231 Chemicals

0.27%
0.43%

271 Food & Staples Retailing 0.03%

0.44%
274

Beverages

0.74%
0.47%
148

Banks 0.18%

0.63%
18

Airlines

0.81%
0.81%

178 Industrial Conglomerates

2.23%
1.09%

385 Metals & Mining 0.62%

1.50%
468

Wireless Telecommunication Services 2.79%

1.82%
1,129

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40 40 40

Experience Consistency Vision

Source: PAM; U.S. Bancorp; Bloomberg.

Returns in USD (Base 100) (9 Years to 10/31/2017)

IV. The Fund’s Performance

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Experience Consistency Vision

Source: PAM, Bloomberg

IV. The Fund’s Performance

MXE´s Price Premium / Discount to NAV (10 Years to 11/30/2017)

5 10 15 20 25 30 35 5 10 15 20 25 30 35 Market Price 10.57 NAV 12.19

30%
25%
20%
15%
10%
5%

0% Premium / Discount -13.3%

Avg. Discount -12.5%

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Experience Consistency Vision

Definitions

MEXBOL-Mexican Stock Exchange: The Mexican Bolsa Index, or the IPyC (Indice de Precios y

Cotizaciones), is a capitalization-weighted index of the leading stocks traded on the Mexican Stock Exchange. The index was developed with a base level of 0.78 on October 30, 1978.

bps: Basis point (BPS) refers to a common unit of measure for interest rates and other percentages in finance.

One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.

P/E Ratio: The price-earnings is the ratio for valuing a company that measures its current share price relative

to its per-share earnings. The price-earnings ratio is also sometimes known as the price multiple or the earnings multiple.

EV/EBITDA: Enterprise value/EBITDA is a popular valuation multiple used in the finance industry to

measure the value of a company. It is the most widely used valuation multiple based on enterprise value and is

ften used in conjunction with, or as an alternative to, the P/E ratio to determine the fair market value of a

company.

EBITDA: EBITDA stands for earnings before interest, taxes, depreciation and amortization. EBITDA is one

indicator of a company's financial performance and is used as a proxy for the earning potential of a business.

Standard Deviation: Is a measure of the dispersion of a set of data from its mean. It is calculated as the square

root of variance by determining the variation between each data point relative to the mean. If the data points are further from the mean, there is higher deviation within the data set.

Jensen’s Alpha: The Jensen's Alpha is a risk-adjusted performance measure that represents the average return
n a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM) given the

portfolio's or investment's beta and the average market return.

EWW: The iShares MSCI Mexico Capped Exchange Traded Fund (ETF) seeks to track the investment results of

a broad- based index composed of Mexican equities.

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Experience Consistency Vision

Disclosures

Earnings growth is not a measure of the Fund’s future performance. The information provided herein represents the opinion of Pichardo Asset Management and not the Fund’s Board of Directors and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling U.S. Bancorp Fund Services, LLC, (414) 765-4255 or visiting www.themexicoequityandincomefund.com. Read it carefully before investing. All investments involve risk. Principal loss is possible. Investing internationally involves additional risks such as currency fluctuations, currency devaluations, price volatility, social and economic instability, differing securities regulation and accounting standards, limited publicly available information, changes in taxation, periods of illiquidity and other factors. These risks are greater in the emerging markets. Stocks of small-and-mid-capitalization companies involve greater volatility and less liquidity than larger-capitalization companies. Investing in Foreign Securities Investment in Mexican securities involves special considerations and risks that are not normally associated with investments in U.S. securities, including (1) relatively higher price volatility, lower liquidity and the small market capitalization of Mexican securities markets; (2) currency fluctuations and the cost of converting Mexican pesos into U.S. dollars; (3) restrictions on foreign investment; (4) political, economic and social risks and uncertainties (5) higher rates of inflation and interest rates than in the United States. The Portfolio Securities are denominated in pesos. As a result, the Portfolio Securities must increase in market value at a rate in excess of the rate of any decline in the value of the peso against the U.S. dollar in order to avoid a decline in their equivalent U.S. dollar value.

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Experience Consistency Vision

Disclosures

Diversification is no guarantee of performance Fund’s holdings and sector allocations are subject to change at any time, and should not be considered recommendations to buy or sell any security. Please refer to the Schedule of Investments in this report for a complete list of fund holdings. Current and future portfolio holdings are subject to risk. THE MEXICO FUND, INC. (MXF) Closed-End Fund listed in the New York Stock Exchange in 1981 1. Investment Objective: Long- term capital appreciation through investments in securities, primarily equity, listed on the Mexican Stock Exchange. 2. Expense ratio: 1.69% (For the semi-annual period ended April 30, 2017) 3. Portfolio Turnover rate: 16.86% (For the semi-annual period ended April 30, 2017) 4. Outstanding shares: 15,027,810 (As of April 30, 2014) 5. Repurchase of stocks: The Fund did not repurchase shares during the semi-annual period ended April 30, 2017. 6. Total net assets: US $279, 335, 461 (As of April 30, 2017) 7. Dividends distribution of 0.2715 per share payable in cash. (For the annual period ended April 30, 2017) 8. Tax Status: No provision has been made for U.S. income or excise taxes for the year ended October 31, 2015 on net investment company taxable income or net long-term capital gains as defined by the Internal Revenue Code (the “Code”), since the Fund intends to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of such income to its stockholders. GAAP prescribes the minimum recognition threshold a tax position must meet before being recognized in the financial statements. An assessment of the Fund’s tax positions has been made and it has been determined that there is no impact to the Fund’s financial statements. Diversification does not ensure profit or protect against losses in a declining market. Earnings growth is not representative of the Fund’s future performance.

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Experience Consistency Vision

Disclosures

The information contained herein reflects the opinion of “Pichardo Asset Management” and as such should not be taken to be fundamental analysis or a decision-making model. Neither should the information be interpreted as a solicitation, offer or recommendation to buy or sell financial securities. It is also subject to changes without prior notification and estimates cannot be guaranteed. The returns mentioned herein represent past gains. Past returns to do not guarantee future gains. The investment yield and principal value of an investment will fluctuate such that when stock is redeemed the value may be higher or lower than the original cost. The current return of the funds may be higher or lower than the yield mentioned herein.