The Greek market remains part of the core investment universe for international funds investing in emerging markets, but the period when Greece stood out mainly because of its low valuations appears to have come to an end. This is the conclusion of Bank of America’s latest strategy report on the EEMEA region, in which Greece falls to seventh place in the rankings, without losing the characteristics that continue to make it attractive to foreign investors.

The report focuses on the changing global environment, the easing of geopolitical tensions, and the decline in oil prices, which have provided relief to markets. However, it argues that the main risk has now shifted to U.S. monetary policy.

BofA expects the Federal Reserve to implement three consecutive interest rate hikes starting in September, a development that could reduce investors’ appetite for risk. Nevertheless, the bank maintains a positive outlook for emerging markets, believing that the major inflation surprises are now behind us and that the U.S. dollar will peak during the third quarter.

Greece’s position in the rankings

According to Bank of America’s quantitative model, Greece ranks seventh among the eleven EEMEA markets.

Egypt tops the list, thanks to its combination of profitability, attractive valuations, and strong stock market momentum. It is followed by South Africa and Turkey, while Hungary, Poland, and the United Arab Emirates also rank ahead of Greece.

The Greek market receives an overall score of 38 points, presenting a mixed picture.

On the positive side, Greece scores highly for dividend yield, receiving 80 points, indicating that dividend distributions remain a key part of its investment appeal.

On the other hand, valuations relative to the market’s historical averages weigh negatively, with Greece receiving zero points in that category.

This should not necessarily be interpreted as a negative assessment. Rather, it reflects how far the Greek market has already come. Improvements in the economy, the restoration of investment-grade status, the strong profitability of Greek banks, and the return of foreign investors have already been largely priced into the market.

High equity risk premium

The most positive aspect of the Greek market remains its equity risk premium.

BofA estimates Greece’s equity risk premium at 10.2%, the third highest among the markets it covers, behind only Turkey and South Korea.

Projected earnings yields are estimated at 9.9% for 2026 and 10.9% for 2027.

Dividend yields are expected to reach 5.3% in 2026 and 5.9% in 2027.

These figures explain why, despite higher valuations, Greece continues to hold a place in international investment portfolios.

Capital flows remain resilient

Fund flow data also remains supportive.

According to BofA, Greece recorded inflows of $28.5 million in the week ending June 17 and $22.5 million in the week ending June 24.

On a monthly basis, June posted total inflows of $30 million, in contrast to several other markets in the region that experienced outflows.

At the same time, Greece is overweight in portfolios benchmarked against the MSCI Emerging Markets Index.

The latest positioning shows funds holding Greece 0.22 percentage points above its benchmark weighting, whereas historically the average allocation has been slightly underweight.

From valuation discounts to stock selection

The main challenge is that the Greek market is no longer cheap by historical standards.

The EV/EBITDA multiple stands at 6.8x, compared with a historical average of 5.8x, while the price-to-earnings (P/E) ratio is 13.9x, compared with its historical average of 12.5x. Both metrics exclude the banking sector.

Bank of America believes the next phase for the Greek market will be more demanding.

While Greece remains an attractive investment destination, there is less scope for further gains driven simply by multiple expansion.

The investment focus is now shifting toward earnings growth, dividend distributions, and the ability of listed companies to deliver on the expectations already reflected in share prices.

For investors, this means greater selectivity.

For the market, it means that the Greek investment story is entering a more mature phase.