N-Q 1 mexeq_103110nq.htm QUARTERLY NOTICE OF PORTFOLIO HOLDINGS mexeq_103110nq.htm
As filed with the Securities and Exchange Commission on December 16, 2010



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 




Investment Company Act file number 811-06111



The Mexico Equity and Income Fund, Inc.
(Exact name of registrant as specified in charter)


615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)


Mr. Gerald Hellerman
C/O U.S. Bancorp Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
(Name and address of agent for service)


866-700-6104
Registrant's telephone number, including area code



Date of fiscal year end: July 31, 2011



Date of reporting period:  October 31, 2010
 
 
 
 
Item 1. Schedule of Investments.
Mexico Equity & Income Fund, Inc.
            
Schedule of Investments
            
October 31, 2010 (Unaudited)
            
             
   
Shares
    
Value
  
COMMON STOCKS - 93.94%
            
             
Airlines - 2.31%
            
Grupo Aeroportuario del Centro Norte, S.A. de C.V.
     500,000     $ 943,877  
Grupo Aeroportuario del Pacifico, S.A. de C.V. - Class B
     267,000       993,574  
              1,937,451  
Beverages - 3.51%
                
Emboteladoras Arca, S.A.
     287,000       1,185,374  
Grupo Continental, S.A.
     620,500       1,760,797  
              2,946,171  
Cement - 0.52%
                
Cemex, S.A. de C.V. CPO (a)
     500,000       438,128  
Chemicals - 4.11%
                
Mexichem, S.A. de C.V.
     1,090,459       3,449,411  
Commercial Banks - 0.76%
                
Grupo Financiero Banorte, S.A. de C.V. - Class O
     400,000       1,706,187  
Commercial Services & Supplies - 1.39%
                
Promotora Ambiental, S.A. de C.V. (a)
     1,277,145       1,163,580  
Construction & Engineering - 9.35%
                
Empresas ICA Sociedad Conroladora, S.A. de C.V. (a)
     606,200       1,597,976  
Impulsora del Desarrollo y el Empleo en America Latina, S.A. de C.V. (a)
     1,881,985       2,441,643  
Promotora y Operadora de Infraestructura, S.A. de C.V. (a)
     1,180,000       3,810,058  
              7,849,677  
Consumer Finance - 1.36%
                
Financiera Independencia S.A.B. de C.V.
     1,178,731       1,139,783  
Financial Groups - 3.36%
                
Corporativo Actinver, S.A. (a)
     748,800       636,735  
GBM Grupo Bursatil Mexicano, S.A. de C.V. Casa de Bolsa
     2,781,828       1,115,164  
              1,751,899  
Food & Staples Retailing - 5.05%
                
Wal-Mart de Mexico, S.A. de C.V. - Class V
     1,548,200       4,235,358  
Food Products - 1.04%
                
Grupo Herdez, S.A.B.
     565,600       874,875  
Hotels, Restaurants & Leisure - 4.92%
                
Grupe, S.A. de C.V. (a)
     3,227,286       4,129,504  
Household Durables - 4.88%
                
Corporativo Geo S.A. de C.V. (a)
     1,289,500       4,092,606  
Household Products - 4.18%
                
Kimberly-Clark de Mexico S.A.B. de C.V.
     558,700       3,506,580  
Industrial Conglomerates - 4.03%
                
Alfa, S.A. - Class A
     408,000       3,383,810  
Insurance - 1.86%
                
Qualita Compania de Seguros
     1,896,351       1,558,792  
Metals & Mining - 10.51%
                
Grupo Mexico, S.A. - Series B
     1,748,098       5,749,130  
Industrias Penoles, S.A.
     108,200       3,065,755  
              8,814,885  
Pharmaceuticals - 8.24%
                
Genomma Lab Internacional SA (a)
     3,181,000       6,911,745  
Retail - 0.75%
                
El Puerto De Liver
     110,000       632,402  
Wireless Telecommunication Services - 21.81%
                
America Movil, S.A. de C.V. - Class L
     6,383,799       18,301,465  
TOTAL COMMON STOCKS (Cost $71,826,419)
           $ 78,824,309  
                 
CAPITAL DEVELOPMENT CERTIFICATES - 2.96%
                
Atlas Discovery Trust II
     300,000     $ 2,481,891  
TOTAL CAPITAL DEVELOPMENT CERTIFICATES (Cost $2,317,515)
           $ 2,481,891  
                 
   
Principal
          
   
Amount
    
Value
  
CORPORATE BONDS - 0.59%
                
Urbi, Desarrollos Urbanos, S.A. de C.V.
                
    8.500%, 04/19/2016
   $ 461,300       495,897  
TOTAL CORPORATE BONDS (Cost $386,992)
           $ 495,897  
FOREIGN GOVERNMENT NOTE/BONDS - 1.40%
                
Mexico-United Mexican Sts
                
    8.125%, 12/30/2019
   $ 865,000       1,176,400  
TOTAL FOREIGN GOVERNMENT NOTE/BONDS (Cost $1,173,986)
           $ 1,176,400  
SHORT TERM INVESTMENTS - 0.78%
                
Commercial Paper - 0.78%
                
Mexican INAFIN
                
0.000% Coupon, 4.666% Effective Yield, 11/03/2010 (b)
     2,948,100 *     238,691  
Mexican INAFIN
                
0.000% Coupon, 4.698% Effective Yield, 11/04/2010 (b)
     5,115,481 *     414,120  
              652,811  
Money Market Funds - 0.49%
                
First American Treasury Obligation - Class A
   $ 416,256       416,256  
TOTAL SHORT TERM INVESTMENTS (Cost $1,064,674)
           $ 1,069,067  
Total Investments  (Cost $76,769,586) - 100.16%
           $ 84,047,564  
Liabilities in Excess of Other Assets - (0.16)%
             (136,457 )
TOTAL NET ASSETS - 100.00%
           $ 83,911,107  
                 
 
Footnotes
                                
Percentages are stated as a percent of net assets.
                          
                                 
(a)
Non-income producing security.
                          
(b)
Effective yield based on the purchase price. The calculation assumes the security
        
 
     is held to maturity.
                              
* Principal amount in Mexican Pesos
                          
                                 
The cost basis of investments for federal income tax purposes at October 31, 2010 was as follows:
  
                                 
Cost of investments**
                           $ 76,769,586  
Gross unrealized appreciation
                             10,975,456  
Gross unrealized depreciation
                             (3,697,478 )
Net unrealized depreciation
                           $ 7,277,978  
                                   
**Because tax adjustments are calculated annually, the above table does not reflect tax adjustments.
          
For the previous fiscal year's federal income tax information, please refer to the Notes to Financial
          
Statements section of the Fund's most recent semi-annual or annual report.
                      
                                   
                                   
                                   
                                   
Summary of Fair Value Exposure at October 31, 2010
                      
                                   
Various inputs are used in determining the value of the Fund’s investments. These inputs are
          
summarized in the three broad levels listed below:
                            
                                   
 
Level 1 - Quoted prices in active markets for identical securities.
                
 
Level 2 - Other significant observable inputs (including quoted prices for similar
          
 
securities, interest rates, prepayment speeds, credit risk, etc.)
                
 
Level 3 - Significant unobservable inputs (including the Fund’s own assumptions in
  
 
determining the fair value of investments.)
                      
                                 
The inputs or methodology used for valuing securities are not an indication of the risk associated
  
with investing in those securities.
                                
                                 
The following is a summary of the inputs used, as of October 31, 2010, in valuing the Fund’s investments
  
carried at fair value:
                                
                                 
   
Level 1
    
Level 2
    
Level 3
          
Total
  
Equity
                                
Airlines
   $ 1,937,451     $ —     $ —           $ 1,937,451  
Beverages
     2,946,171       —       —             2,946,171  
Cement
     438,128       —       —             438,128  
Chemicals
     3,449,411       —       —             3,449,411  
Commercial Banks
     2,342,922       —       —             2,342,922  
Commercial Services & Supplies
     1,163,580       —       —             1,163,580  
Construction & Engineering
     7,849,677       —       —             7,849,677  
Consumer Finance
     1,139,783       —       —             1,139,783  
Financial Groups
     1,115,164       —       —             1,115,164  
Food & Staples Retailing
     4,235,358       —       —             4,235,358  
Food Products
     874,875       —       —             874,875  
Hotels, Restaurants & Leisure
     4,129,504       —       —             4,129,504  
Household Durables
     4,092,606       —       —             4,092,606  
Household Products
     3,506,580       —       —             3,506,580  
Industrial Conglomerates
     3,383,810       —       —             3,383,810  
Insurance
     1,558,792       —       —             1,558,792  
Metals & Mining
     8,814,885       —       —             8,814,885  
Pharmaceuticals
     6,911,745       —       —             6,911,745  
Retail
     632,402       —       —             632,402  
Wireless Telecommunication Services
     18,301,465       —       —             18,301,465  
Total Equity
     78,824,309       —       —       —       78,824,309  
                                         
Capital Development Certificates
     —       2,481,891                       2,481,891  
                                         
Mexican Government Bonds
     —       1,176,400       —               1,176,400  
                                         
Corporate Bonds
                                        
Housing
     —       495,897       —               495,897  
                                         
Short-Term Investments
     416,256       652,811       —               1,069,067  
Total Investments in Securities
   $ 79,240,565     $ 4,806,999     $ —     $ —     $ 84,047,564  
                                         
Disclosures about Derivative Instruments and Hedging Activities
                          
                                         
The fund did not invest in derivative securities or engaged in hedging activities during the period ended October 31, 2010.
  

 
 
 
 
Item 2. Controls and Procedures.
 
(a)  
The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)  
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.


 
Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)).  Filed herewith.




 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)    The Mexico Equity and Income Fund, Inc.       

By (Signature and Title)    /s/ Maria Eugenia Pichardo            
Maria Eugenia Pichardo, President

Date    December 10, 2010                                                             



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*    /s/ Maria Eugenia Pichardo         
Maria Eugenia Pichardo, President

Date    December 10, 2010                                                             
 
By (Signature and Title)*    /s/ Gerald Hellerman                     
Gerald Hellerman, Chief Financial Officer

Date    December 14, 2010                                                             

* Print the name and title of each signing officer under his or her signature.