If you’re looking to supercharge your returns over the long term, I believe it’s worth looking at investment opportunities outside the FTSE 100. Many emerging markets across the world are growing considerably faster than the UK and other developed countries right now. Today I’ll show you how to capitalise on this, with two easy-to-buy investment trusts that I believe have incredible long-term, wealth-generating potential.
JPMorgan Chinese Investment Trust
With a population of a staggering 1.4bn people, China is expected to surpass the United States to become the world’s largest economy in the near future. Urbanisation across the Asian powerhouse has resulted in impressive economic growth in recent decades. However, with around 44% of the population still living a rural lifestyle, it’s likely that there’s significant growth to come.
As China transitions from a capital expenditure-led economy to a consumer-led one, the wealth of the Chinese middle class is increasing rapidly. This should result in an abundance of investment opportunities across sectors such technology, leisure, travel and healthcare. Can UK investors capitalise on this exciting growth story? Absolutely.
One easy way to get exposure to the country is through the JPMorgan Chinese Investment Trust (LSE: JMC). Listed on the London Stock Exchange, you can buy this trust through regular brokerage platforms such as Hargreaves Lansdown. Its ongoing charge is 1.4%.
JMC aims to provide investors with long-term capital growth by investing in companies associated with Greater China. The portfolio holds between 45-65 stocks, including names such as Alibaba, Tencent Holdings and Bank of China. It’s currently overweight in the consumer, technology and healthcare sectors.
The trust has performed spectacularly well over the last year, returning over 50%. Of course, after such a strong run, it would not surprise me if Chinese stocks experienced a correction. However, over the long term, I believe the potential here is massive. As such, this could be an excellent addition to a diversified growth portfolio.
JPMorgan Emerging Markets Investment Trust
For those looking to spread their capital over several different regions in the pursuit of powerful growth, the JPMorgan Emerging Markets Investment Trust (LSE: JMG) could be a good option. Like the Chinese trust, it can be purchased very easily through a regular broker under ticker JMG. Ongoing charges are 1.3%.
While JMG has a near-20% exposure to China, it also has significant exposure to fast-growing economies such as India, Brazil and Taiwan. Key stocks in the portfolio currently include Tencent Holdings, Alibaba and AIA Group.
Emerging markets’ growth has been sluggish in recent years, however, momentum appears to be picking up again. As a result, the trust has returned almost 30% over the past year.
It’s worth remembering that emerging market regions can be volatile. Therefore, these kinds of investments may not be suited to risk-averse investors. However, for those comfortable with volatility, I believe both trusts offer exciting long-term potential. If you don’t invest now, you may look back in a decade’s time, and regret it.
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Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.