For decades, global supply chains have been all about one thing: efficiency. Companies chased the lowest production costs, even if that meant manufacturing goods halfway around the world. But then came the pandemic, geopolitical tensions, and supply chain bottlenecks that left businesses scrambling.Now, a shift is underway. Companies are prioritizing resilience over pure cost savings, leading to a surge in nearshoring (moving production closer to home) and friendshoring (relocating supply chains to politically aligned countries). These trends aren’t just business strategies—they’re investment opportunities.Let’s break down what’s happening, why it matters, and how you can profit from it.

Why Nearshoring and Friendshoring Are Taking Over

1. Supply Chain Shocks Exposed the Risks of Offshoring

When COVID-19 shut down factories in China, companies across the globe learned a tough lesson: relying too heavily on one country can be a disaster. Supply chain disruptions led to skyrocketing costs, empty shelves, and lost revenue. Even now, geopolitical risks—like U.S.-China tensions—continue to fuel uncertainty.

Companies want stability, and that means diversifying where they manufacture goods.

2. Governments Are Pushing for Supply Chain Security

The U.S., European Union, and other major economies are backing nearshoring and friendshoring with incentives. The CHIPS Act, for example, is pouring billions into domestic semiconductor production. The Inflation Reduction Act is incentivizing clean energy manufacturing in North America. Mexico, Canada, and parts of Southeast Asia are benefiting as companies look for safer, friendlier supply chain alternatives.

3. Automation and Rising Wages Are Making Nearshoring More Attractive

Labor costs in China have risen significantly over the past two decades. At the same time, automation and robotics have made manufacturing in higher-cost regions more feasible. Companies can now bring production closer to home without sacrificing too much on labor expenses.

Where the Investment Opportunities Are

This isn’t just a corporate strategy shift—it’s a massive investment opportunity. Here’s where smart investors are paying attention:

1. Industrial Real Estate & Infrastructure

Companies moving manufacturing closer to home need factories, warehouses, and logistics hubs. This is driving demand for industrial real estate, particularly in places like:

• Mexico (which has become the #1 U.S. trade partner, surpassing China in 2023)

• Texas and the U.S. Southwest (home to major semiconductor and EV factories)

• Southeast Asia, especially Vietnam, India, and Thailand

How to invest: Look at REITs (Real Estate Investment Trusts) focused on industrial properties or infrastructure funds targeting nearshoring-related developments.

2. Transportation & Logistics Stocks

Nearshoring doesn’t eliminate the need for shipping and logistics—it just changes the routes. With supply chains shifting to Mexico, the U.S., and Southeast Asia, companies in rail, trucking, and port logistics are seeing a boost.

Stocks to watch: Union Pacific (UNP), Kansas City Southern (now part of Canadian Pacific Kansas City), and major trucking firms that serve U.S.-Mexico trade routes.

3. Manufacturing & Automation Companies

Companies making robotics, industrial equipment, and advanced manufacturing technologies are benefiting from nearshoring. Businesses need automation to keep costs competitive as they relocate.

Stocks to watch: Rockwell Automation (ROK), Siemens (SIEGY), ABB Ltd (ABB), and semiconductor equipment makers like ASML (ASML).

4. Emerging Market ETFs & Stocks

As friendshoring gains traction, some emerging markets are positioned to win big—especially India, Vietnam, and Indonesia. These countries are attracting investments from companies looking to diversify away from China.

How to invest: Consider ETFs like iShares MSCI Emerging Markets ex-China ETF (EMXC) or country-specific funds like VanEck Vietnam ETF (VNM).

5. U.S. & Mexican Manufacturing Stocks

With Mexico becoming a nearshoring hub, companies with manufacturing exposure there stand to gain. Automakers, semiconductor firms, and industrial manufacturers are among the biggest winners.

Stocks to watch: General Motors (GM), Tesla (TSLA), and major suppliers with plants in Mexico like Aptiv (APTV).

The Bottom Line: How to Position Your Portfolio

Nearshoring and friendshoring aren’t short-term trends—they’re fundamental shifts in how global supply chains operate. Governments are backing it, companies are committing to it, and investors who get in early stand to benefit.

If you’re looking to take advantage:

• Consider industrial real estate, logistics, and infrastructure investments.

• Look at automation and manufacturing companies that enable nearshoring.

• Explore emerging market funds focused on countries benefiting from friendshoring.

The global economy is shifting, and smart investors are shifting with it.

The information presented is for educational purposes only and not an offer or solicitation for any specific investments. Investments involve risk and are not guaranteed. Consult with a financial adviser before making any investment decisions. Past performance does not guarantee future results.