The US and Chinese markets are attracting attention for global diversification due to the potential for growth. This is especially relevant with the anticipated return of Donald Trump to the presidency, which is expected to benefit the American economy.

According to recent data from ACE MF, US equity funds have shown impressive compounded annual growth rates (CAGR) of 33.9% over the past year and 12.3% over three years. On the other hand, China-focused equity funds have reported lower returns, with a CAGR of 15.2% over one year and a decline of 6.0% over three years.

Experts suggest that the intensifying competition between the US and China requires a reevaluation of investment strategies. Narender Singh, a smallcase manager and founder of Growth Investing, highlights the need to consider the significant shifts occurring in these two major economies, as traditional valuation models based on historical performance may not adequately capture these changes. Investors are advised to take these dynamics into account when deciding where to allocate their funds for optimal diversification.