Edgar Filing: MEXICO EQUITY & INCOME FUND INC

As filed with the Securities and Exchange Commission on December 28, 2018

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 & 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. Arnulfo Rodríguez

C/O U.S. Bancorp Fund Services, LLC

615 E. Michigan Street

Milwaukee, WI 53202
(Name and address of agent for service)

877-785-0367

Registrant's telephone number, including area code

Date of fiscal year end: July 31, 2019

Date of reporting period: October 31, 2018

Item 1. Schedule of Investments.

The Mexico Equity and Income Fund, Inc.
Schedule of Investments
October 31, 2018 (Unaudited)

MEXICO - 88.69%	Shares			Value

COMMON STOCKS - 81.46%
Auto Parts and Equipment - 2.33%
Rassini, S.A.B. de C.V.		529,998		$	1,797,165
Beverages - 9.73%
Arca Continental, S.A.B. de C.V.		600,116			3,017,826
Coca-Cola Femsa, S.A.B. de C.V. - Series L		119,000			678,736
Fomento Economico Mexicano, S.A.B. de C.V. - Series UBD		450,215			3,827,434
					7,523,996
Building Materials - 12.70%
Cemex, S.A.B. de C.V. - Series CPO (a)		7,269,615			3,628,858
Grupo Cementos de Chihuahua, S.A.B. de C.V.		1,147,866			6,185,957
					9,814,815
Chemical Products - 7.97%
Alpek, S.A.B. de C.V. - Series A (a)		2,216,700			2,918,024
Mexichem, S.A.B. de C.V.		1,229,225			3,247,152
					6,165,176
Construction and Infrastructure - 3.88%
Promotora y Operadora de Infraestructura, S.A.B. de C.V.		176,734			1,608,361
Promotora y Operadora de Infraestructura, S.A.B. de C.V. - Series L		203,045			1,394,399
					3,002,760
Consumer Financing Services - 1.40%
Credito Real, S.A.B. de C.V.		948,460			1,085,115
Consumer Products - 0.03%
Kimberly-Clark de Mexico, S.A.B. de C.V. - Series A		17,389			25,065
Energy - 0.96%
Infraestructura Energetica Nova, S.A.B. de C.V.		189,771			743,922
Financial Groups - 8.23%
Banco del Bajio, S.A.		871,167			1,712,464
Grupo Financiero Banorte, S.A.B. de C.V. - Series O		556,988			3,064,452
Regional, S.A.B. de C.V.		325,733			1,586,391
					6,363,307
Food - 1.51%
Gruma, S.A.B. de C.V. - Series B		111,664			1,165,386
Hotels, Restaurants, and Recreation - 3.33%
Alsea, S.A.B. de C.V. - Series A		627,000			1,603,208
Grupe, S.A.B. de C.V. - Series B (a)(c)		429,707			970,970
					2,574,178
Mining - 5.51%
Grupo Mexico, S.A.B. de C.V. - Series B		1,420,572			3,277,773
Industrias Penoles, S.A.B. de C.V.		69,383			977,901
					4,255,674
Real Estate Services - 3.14%
Corporacion Inmobiliaria Vesta, S.A.B. de C.V.		1,988,124			2,427,257
Telecommunication - 20.74%
America Movil, S.A.B. de C.V. - Series L		20,552,694			14,883,395
Telesites S.A.B. de C.V. (a)		1,871,027			1,154,122
					16,037,517
TOTAL COMMON STOCKS (Cost $68,052,142)					62,981,333

CAPITAL DEVELOPMENT CERTIFICATES - 2.03%
Atlas Discovery Trust II (b)(c)(d)		300,000			1,569,590
TOTAL CAPITAL DEVELOPMENT CERTIFICATES (Cost $1,460,703)					1,569,590

MEXICAN MUTUAL FUNDS - 0.65%
Scotiabankinverlat - Scotia Gubernamental S.A. de C.V. SIID (a)		2,953,896			505,567
TOTAL MEXICAN MUTUAL FUNDS (Cost $528,903)					505,567

SHORT-TERM INVESTMENTS - 4.55%
Mexican CETES
0.000% Coupon, 8.020% Effective Yield, 11/08/2018 (e)		71,661,730	*		3,515,873
TOTAL SHORT-TERM INVESTMENTS (Cost $3,647,607)					3,515,873
TOTAL MEXICO (Cost $73,689,355)					68,572,363

UNITED STATES - 6.85%		Value

INVESTMENT COMPANIES - 6.85%
Fidelity Investments Money Market Funds - Government Portfolio - Institutional Class - 2.060% (f)	1,500,000		1,500,000
Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Class - 2.047% (f)	3,799,298		3,799,298
TOTAL INVESTMENT COMPANIES (Cost $5,299,298)			5,299,298
TOTAL UNITED STATES (Cost $5,299,298)

Total Investments (Cost $78,988,653) - 95.54%			73,871,661
Other Assets in Excess of Liabilities - 4.46%		3,438,042
TOTAL NET ASSETS - 100.00%		77,309,703

Percentages are stated as a percent of net assets.

(a)		Non-income producing security.
(b)		Fair valued security. The total market value of this security was $1,569,590, representing 2.03% of net assets.
(c)		Illiquid securities. The total market value of these securities were $2,540,560, representing 3.29% of net assets.
(d)		Level 3 security. Value determined using significant unobservable inputs.
(e)		Effective yield based on the purchase price. The calculation assumes the security is held to maturity.
(f)		The rate shown represents the 7-day yield at October 31, 2018.
*		Principal amount in Mexican pesos.

Significant accounting policies are as follows:

Portfolio Valuation: Investments are stated at value. Listed equity securities are valued at the closing price on the exchange or market on
which the security is primarily traded (the “Primary Market”) at the valuation time. If the security did not trade on the Primary Market,
it shall be valued at the closing price on another comparable exchange where it trades at the valuation time. If there are no such closing
prices, the security shall be valued at the mean between the most recent highest bid and lowest ask prices at the valuation time.
Investments in short-term debt securities having a maturity of 60 days or less are valued at amortized cost if their term to maturity from the date of
purchase was less than 60 days, or by amortizing their value on the 61st day prior to maturity if their term to maturity from the date of purchase when
acquired by the Fund was more than 60 days. Other assets and securities for which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Directors. These methods include, but are not limited to, the fundamental analytical data relating to
the investment; the nature and duration of restrictions in the market in which they are traded (including the time needed to dispose of the security,
methods of soliciting offers and mechanics of transfer); the evaluation of the forces which influence the market in which these securities may be
purchased or sold, including the economic outlook and the condition of the industry in which the issuer participates. The Fund has a Valuation
Committee comprised of independent directors which oversees the valuation of portfolio securities.

The Valuation Committee of the Fund shall meet to consider any fair valuations. This consideration includes reviewing various factors set forth
in the pricing procedures adopted by the Board of Directors and other factors as warranted. In considering a fair value determination, factors that
may be considered, among others include; the type and structure of the security; unusual events or circumstances relating to the security's issuer;
general market conditions; prior day's valuation; fundamental analytical data; size of the holding; cost of the security on the date of purchase;
trading activity and prices of similar securities or financial instruments.

FAIR VALUE MEASUREMENTS

The Fund follows the FASB ASC Topic 820 hierarchy, under which various inputs are used in determining the value of the Fund’s investments.
The basis of the hierarchy is dependent upon various “inputs” used to determine the value of the Fund’s investments. These inputs are summarized
in the three broad levels listed below:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either
directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for
similar instruments, interest rates, prepayment speeds, credit risks, yield curves, default rates and similar data.
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing
the company's own assumptions about the assumptions a market participant would use in valuing the asset or
liability , and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example,
the type of security, whether the security is new and not yet established in the marketplace, the liquidity of the markets, and other characteristics
particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market
the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest
for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the
fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant on
the lowest level input that is significant to the fair value measurement in its entirety.

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 to value the Fund's investments carried at fair value as of October 31, 2018:

	Level 1		Level 2		Level 3		Total
Equity
Auto Parts and Equipment	$	1,797,165	$	-	$	-	$	1,797,165
Beverages		7,523,996		-		-		7,523,996
Building Materials		9,814,815		-		-		9,814,815
Capital Development Certificates		-		-		1,569,590		1,569,590
Chemical Products		6,165,176		-		-		6,165,176
Construction and Infrastructure		3,002,760		-		-		3,002,760
Consumer Financing Services		1,085,115						1,085,115
Consumer Products		25,065		-		-		25,065
Energy		743,922		-		-		743,922
Financial Groups		6,363,307		-		-		6,363,307
Food		1,165,386		-		-		1,165,386
Hotels, Restaurants, and Recreation		2,574,178		-		-		2,574,178
Mining		4,255,674		-		-		4,255,674
Real Estate Services		2,427,257		-		-		2,427,257
Telecommunications		16,037,517		-		-		16,037,517
Total Equity	$	62,981,333	$	-	$	1,569,590	$	64,550,923

Mexican Mutual Funds	$	505,567	$	-	$	-	$	505,567

Short-Term Investments	$	5,299,298	$	3,515,873	$	-	$	8,815,171
Total Investments in Securities	$	68,786,198	$	3,515,873	$	1,569,590	$	73,871,661


Disclosures about Derivative Instruments and Hedging Activities

The Fund did not invest in derivative securities or engage in hedging activities during the period ended October 31, 2018.

Level 3 Reconciliation Disclosure

Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

Description					Investments in Securities
Balance as of July 31, 2018					$	1,695,905
Acquisition/Purchase						-
Sales						-
Realized gain						-
Change in unrealized appreciation (depreciation)						(126,315	)
Balance as of October 31, 2018					$	1,569,590


The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and
categorized within Level 3 as of October 31, 2018:
	Fair Value October 31, 2018		Valuation Methodologies	Unobservable Input ⁽¹⁾	Impact to Valuation from an Increase in Input ⁽²⁾
Capital Development Certificates	$	1,569,590	Market Comparables/ Sum of the Parts Valuation	Liquidity Discount	Decrease

¹	In determining certain of these inputs, management evaluates a variety of factors including economic conditions, foreign exchange rates, industry and market developments, market valuations of comparable companies and company specific developments.

²	This column represents the directional change in the fair value of the Level 3 investment that would result from increases to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect.

Item 2. Controls and Procedures.

(a)

The Registrant’s President and 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”)) (17 CFR 270.30a-3(c)) 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 (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d‑15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)).

(b)

There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal quarter that have materially affected, or are 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 1940 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 & Income Fund, Inc.

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

Maria Eugenia Pichardo, President

Date December 14, 2018

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 14, 2018

By (Signature and Title)* /s/ Arnulfo Rodríguez

Arnulfo Rodríguez, Chief Financial Officer

Date December 14, 2018

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