Yet many have been sceptical about the future prospects of these emerging nations. There’s been much talk of a slowdown in China, and political in-fighting in India. But if we dig a little deeper, we find that the fundamentals are remarkably resilient: Chinese GDP has still been growing at 6.7% per annum, while India has been growing at 7.9%.

China and India: industrial powerhouses

The broad picture is that these countries are now industrial powerhouses, and they’re set to boom relative to more developed markets for decades to come.

Profitability at a range of companies in these countries has been surging. Take China Pacific Insurance. Net profits were CNY9.2bn in 2013, and this jumped to CNY17.7bn in 2015. Revenue increased from CNY193bn in 2013 to CNY246bn in 2015. These are startlingly strong numbers.

Or take India’s Infosys. Net profits were INR104bn in 2013, and this rose to INR136bn in 2015, while turnover climbed from INR493bn in 2013 to INR630bn in 2015.

Rank after rank of businesses has seen rapid growth in both revenues and earnings.

I’ve chosen to invest in these countries with two investment trusts: Fidelity China Special Situations (LSE:FCSS) and JP Morgan Indian Investment Trust (LSE:JII). How well have these done?

On 1 January 2016 FCSS was priced at 121p per share. It has now risen to 170p. That’s an increase of 40%. On 1 January JII stood at 477p. It has now risen to 641p. That’s an increase of 34%.

Why have the shares risen so much? Well, part of this is currency fluctuations. Since January the pound has fallen by about 10% against the yuan, largely because of the Brexit vote on 23 June.

And this is a great time to invest

Also, stock indices such as the Hang Seng and the Sensex have been on the up. Plus, these are well-managed funds that have produced better returns than the overall markets in these countries. What’s more, a substantial amount of gearing for Fidelity China has added to the growth.

Yet the amazing thing is, in terms of equities, we’re still really only at the end of a 17-year bear market, and the next bull market hasn’t even got underway. That means there are likely to be many more stock price rises to come. Thus, if you haven’t bought in yet, this may be a great time to get on board.

And what makes investment trusts like these even more attractive than standard funds is that they currently trade at sizeable discounts. The current discount on Fidelity China is 14.8%. While JP Morgan India is 10.2% cheaper than its net asset value.

That’s why I’ve invested a large part of my portfolio in these funds, and I think you should too. People are often afraid of the growing power of these emerging nations. But if you’re an investor considering buying into China and India, I would encourage you to make the leap.

The post My investments in China and India are up over 30% this year appeared first on The Motley Fool UK.

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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Now, at the time, the British could have seen the US as the enemy. But instead it embraced it, and built partnerships and connections with it as it took over the world.

Shanghai already puts cities like New York in the shade

Stock markets in both America and Europe stormed ahead in the twentieth century. Now, in the twenty-first century, China and India are the new emerging giants. And the West has to decide whether to fight them or embrace them.

Now everyone is familiar with this story. But what we may not realise is how fast this change is happening. Already, China has 7 of the 20 most valuable companies worldwide. If you want to see what the developing world is today, just visit Shanghai and you will see a city that puts New York and London in the shade.

Yet, analyse the progression of the Hang Seng index since the turn of the century, and you will find a stock market that has been in the doldrums, rising only slightly if at all. The Chinese and Indian stock markets are amongst the cheapest in the world.

This is why I am a firm believer in the investment credentials of China and India, and have substantial holdings in this region. I think that, after a long and difficult bear market that has lasted 17 years, we are on the verge of an astonishing global equity bull market. And that boom should be centred on China and India.

This is the ultimate contrarian play

And with share prices in emerging markets as cheap as they have been for the past decade, there has never been a better time to invest in my opinion. After all, you don’t buy when stock markets are already rocketing ahead and anyone and everyone is investing, but when people are saying they wouldn’t touch these markets with a barge pole, yet the fundamental strengths are all still there. From my point of view, investing in China and India is the ultimate contrarian play.

And I wouldn’t invest just a small amount of money in this sector. The bulk of my cash is invested in emerging markets. There are many popular funds to choose from, but I have a preference for investment trusts, as they are trading on particularly heavy discounts at the moment, meaning you get that much more for your money.

My picks are Fidelity China Special Situations and JP Morgan Indian Investment Trust, but there are several high performers you can choose from.

But remember, there will always be ups and downs, scares and panics with these type of investments. You have to be prepared to ride out the storms with the firm hope that, in the long run, you will do well.

The post Why I am investing in China and India appeared first on The Motley Fool UK.

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• Here’s how Aviva shares could soon rise a further 20%… or fall 15%!
• £5,000 invested in high-yield FTSE 250 stock Domino’s Pizza on 7 April is now worth…
• Tesla stock’s up 50% in a year. Could it go even higher?
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Prabhat owns shares in Fidelity China Special Situations and JP Morgan Indian Investment Trust. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Yet the India I remember from my visits to the country in past years seemed to be a bit of a mess. It was dirty, polluted and the infrastructure was terrible. Indians tended always to be late, and rather disorganised.

India is changing. And fast.

But this is changing. And fast. How quickly is apparent when you visit the country today. The infrastructure is already being transformed. A growing and young population means the economy is booming. Indian movies are now on a par with Hollywood. After I and my wife watch Hindi serials on TV, Western programmes seem to pale in comparison.

India owns Jaguar-Land Rover, Mittal Steel, Infosys and a host of other companies. But insiders will tell you that this is just the beginning.

30 years ago, China was seen as a backward nation whose economy was mainly based on agriculture, with very little in the way of manufacturing or services. At the time a round-faced politician with an endearing smile called Deng Xiaoping realised that China should become more like the West, and that you could still have a Communist political system alongside a capitalist economy.

You don’t need me to tell you the transformation that this nation has undergone since then. It is almost a cliché to say China will soon be the most powerful nation on earth.

This is why I have started to buy into India

Today India is run by a man in a neat white beard with glasses called Narendra Modi. He is a Hindu from Varanasi with a degree in political science and a (well-known) penchant for yoga. And I think he is India’s Deng Xiaoping.

I’m a firm believer that it would be naïve for investors just to buy shares in UK-based companies. After all, shares prices depend upon the profitability of companies. And that profitability will depend upon the strength of the nation’s economy, and it’s competitiveness. Right now, and for decades to come, India and China will be the strongest and most competitive nations on earth.

To me, it’s a no-brainer, and I plan to invest an increasing proportion of my cash in Indian shares.

Because this is the type of market which requires a lot of in-depth research, I would invest in unit or investment trusts rather than individual shares. Unfortunately, there aren’t that many good India-focused funds around at the moment, but my picks are J.P. Morgan Indian Investment Trust (LSE: JII), which is currently trading on an attractive 12% discount, and Jupiter India.

You see, a good investment story is all about excitement and hope. And there is no more excitement in the world right now than in India.

The post Can India Be The Next China? appeared first on The Motley Fool UK.

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• Down 45% in 5 years, this UK stock now offers a stunning 11% dividend yield!
• Here’s how Aviva shares could soon rise a further 20%… or fall 15%!
• £5,000 invested in high-yield FTSE 250 stock Domino’s Pizza on 7 April is now worth…
• Tesla stock’s up 50% in a year. Could it go even higher?
• Up 9% today, is this FTSE 250 share’s recovery gaining pace?

Prabhat Sakya has a holding in Jupiter India. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.