India's investment appeal grows amid global portfolio shifts

Gustavo Medeiros, Head of Research at Ashmore Group, discussed investment trends in India, the U.S., and China for 2025. He notes that India remains attractive to investors but trades at a smaller premium compared to emerging markets than it did before recent market corrections. Medeiros emphasized India as a strong long-term growth opportunity. He praised the country's pro-market economic policies over the last decade. Although Ashmore has been underweight in India for a year, they are starting to increase their investments again after the market correction. He pointed out important trends in India, such as involving women in the workforce and boosting manufacturing capacity. He prefers to invest in larger-cap companies, which he believes are currently more reasonably valued. He also sees potential in the financial sector. Medeiros commented on the decline in U.S. stocks, calling it a global portfolio rebalancing. He noted that the U.S. is no longer seen as exceptional due to changes in fiscal policy. Medeiros explained that the U.S. government has reduced excessive spending, which he believes contributed to the market correction. He warned that current earnings growth in the U.S. may not be sustainable without increased government support. Regarding China, Medeiros revealed that Ashmore is slightly reducing its investments there while adding to its exposure in India. He believes some investors still support China due to its policy environment. In the early months of 2025, Europe and China have outperformed, and India may attract more investment as valuations improve. He indicated that further shifts might occur in how investors view India compared to other markets.