Funds Centre |
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By Mark Dampier, Head of Research
Urbanisation is not a new phenomenon, but development in Emerging Markets is providing exciting opportunities providing you know where to look. Modern visitors to any great metropolis in Asia or Latin America will sense similar changes underway; the ancient is gradually giving way to the modern. This development is gathering pace, fuelled by a growing prosperity in emerging markets across the globe. For example, over the next twelve years more than 300 million people will move from China's countryside to her cities, and the UN predicts the population of Mumbai (Bombay) will reach 25 million within twenty years. Great internal changes will have to take place before emerging countries can convert to urban societies. The most obvious need is for new buildings, so companies involved in the construction industry are well placed to benefit. There will be greater demand on transport and water networks, as well as power grids. This will require significant investment. Retailers and finance companies should also prosper as people look to spend and save their new wealth. How can you benefit from this emerging trend? We believe the JM Finn Global Opportunities Fund is a superb place to start. The fund manager, Anthony Eaton, has spotted the vast potential of urbanisation and has structured the fund to take advantage. He can invest in companies at every link in the supply chain. Many of these companies are listed in the West, but have significant operations in Emerging Markets. In the construction industry this could include companies that provide raw materials, businesses that build construction machinery and those that sell the finished building. The fund is therefore able to benefit at every stage of the process. The performance of the JM Finn Global Opportunities Fund since launch in January 2004 has been impressive. The fund has risen 11.5% compared to a sector average of just 53.9%, but please remember that past performance is not a guide to future returns and its value can go down as well as up. Prospective investors should expect this fund to be more volatile than the average global fund because it takes a focused approach and invests in higher risk markets. In our opinion it represents a compelling choice for long term investors who want to capitalise on the opportunities created by urbanisation. The JM Finn Global Opportunities is available through Hargreaves Lansdown with an initial saving of 4.75%. Investors can apply online with a debit card or download application forms or transfer forms from our website. The Fund of the Month is written by Hargreaves Lansdown. An independent broker offering unit trust, stockbroking, pension and investment services. Useful links: |
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