There is currently a race among investors around the world to invest in the Chinese market. The Dragon's incentive package is believed to be the reason behind this. But GQG's Rajiv Jain is not in this race. The manager of the top-performing $23 billion GQG Partners Emerging Markets Equity Fund has maintained his stake in Chinese stocks at around 12% of the fund, which is almost half the weight of its benchmark.

This has ended the fund's outperformance this year, as the MSCI China index rose more than 30% in just 10 days.

Rajiv Jain's View
Rajiv Jain is not very impressed with the rally that has started in China because it reminds him of the "reopening of trade" in late 2022, where similar buying was seen after China lifted the Covid restrictions.

But that boom ended in a few months. Because the dragon was not able to recover the economy as per the investors' expectations. In the last three years, Rajiv Jain's fund has outperformed 92% of its rivals tracked by Bloomberg.

Its hedge fund clients have invested the most in Chinese equities on a week-to-week basis since Goldman Sachs began tracking the data in 2016. Meanwhile, the $8 billion KraneShares CSI China Internet Fund on Tuesday attracted $700 million in investments, the biggest investment since the exchange-traded fund was launched in 2013.

Focus on housing market
Jain said that even though the current stimulus helps boost sentiment and provide more liquidity to the stock market, President Xi Jinping needs to pay attention to the country's troubled housing market.

At least 48 million homes in China remain unfinished before completion, according to Bloomberg Intelligence. Analysts estimate that China will need up to 5 trillion yuan ($712 billion) to buy unsold homes from developers and convert them into affordable housing. "How do you ensure that the real estate situation stabilizes, since most people don't even have stocks?" Jain said. Will GQG suffer a setback? Jain was headed for another stellar year, thanks in part to his long-standing underweight position in Chinese stocks. His fund returned 14% in the first 8 months, higher than the MSCI Emerging Markets Index's 9.6% return. But as of October 2, it lagged the benchmark by 3% as Chinese stocks surged. Rajiv Jain has a slightly different perspective than his peers. "It's okay if the party goes on without us," he said. According to Jain, the recent rally has disproportionately benefited consumer tech stocks like Alibaba Group Holding Ltd., because of their large presence in the MSCI China Index. They rose as investors flocked to cover short positions or for exposure to China. Consumer tech stocks like Alibaba Group Holding Ltd. are popular with hedge fund investors like David Tepper and Michael Burry. He said these Internet consumer companies are not growing as fast as before. Alibaba, once the top performer in China's new economy, has seen revenue growth stagnate as e-commerce competition has intensified. "It's a good trade, but can you really invest in it for three or five years?" said Jain. Rajiv Jain's performance