investing in emerging markets: insights from a veteran investor

Emerging markets have gained significant attention in 2024 due to their growing economies and consumer demand, but not all markets are equally promising. George Boubouras, managing director at K2 Asset Management, expressed concerns about China's economic performance, noting that its GDP growth of 4.7% fell short of expectations. This has led to a cautious approach among Western fund managers regarding investments in China, compounded by trade tensions with the EU and U.S. that further dampen investor sentiment. Boubouras highlighted the need for China to stimulate domestic demand and expand its national accounts to improve economic conditions. While he remains underweight on emerging markets overall, he sees potential in Southeast Asia, India, and Greece. The Indian market, represented by the BSE Sensex and Nifty 50 indices, has shown strong performance, with year-to-date increases of 14% and 15%, respectively. In contrast, Greece's economy has shown signs of recovery, with a 13.5% rise in the MSCI Greece index. However, Boubouras emphasized the necessity for Greece to diversify its economy beyond agriculture and tourism to sustain growth. The country has also seen improvements in its credit ratings, which could attract more investment. Looking ahead, Boubouras favors developed markets and investment-grade credit, along with diversified REITs and commodities, indicating a strategic shift in investment focus amidst the complexities of emerging markets.