Could this FTSE 250 trust overcome Rolls-Royce in the next 5 years? I think so, and something else!

Rolls-Royce It has been one of the best investments in the United Kingdom in the last five years, but I think the future of shares is questionable. Risk investors with long -term vision may prefer a Ftse 250 Investment trust with stable growth potential.

It cannot be denied that Rolls actions have been in an absolute tear. They have almost 500% in the last two years, far exceeding any other action in the Ftse 100. But growth like that rarely is rational or sustainable.

As he continues to shoot, the possibility of a correction becomes increasingly likely.

Upcoming results

Next Thursday (February 27), Rolls will announce its results throughout the year by 2024. It is expected to obtain profits from underlying operations that vary £ 2.1bn- £ 2.3 billion, with a free cash flow of £ 2.1bn- £ 2.2bn. It also plans to restore dividends, starting with a payment ratio of 30% of the profits after taxes.

All of that is great and, if one, the stock could rise even more.

The risk is that if you do not meet these expectations, investors could be scared and shares could dive. With the new limited buyers to prop up the price, the losses could be significant. That is the reason why analysts are increasingly bassist, with an average objective price of 12 months of 632p, 1.4% below today's price.

A more reliable and low risk option?

Do not be misunderstood, Rolls is a great company that is in an excellent position to continue working well. But historically, its price has been volatile and is currently in a precarious position.

When I think in the long term, I find a more attractive consistent and sustainable growth. For that, investors may want to consider JPMorgan American Investment Trust (LSE: Jam), a Fideicomiso centered on the USA. That consistent returns were delivered for decades.

Since 2005, the price of the action has grown at an annualized rate of 12% per year. At the same time, Rolls has grown at an annualized rate of 10% per year. And since the JPMorgan Trust is highly diversified and less prone to volatility, I am safer that it could maintain that growth.

Stability through diversity

The main funds of the fund are dominated by American technological actions. In fact, 25% of the fund is composed of only five actions: amazon, Microsoft, Goal, Nvidia and Apple.

Below there are some financial actions such as Capital one, Berkshire and Loews. In total, the portfolio is composed of 283 holdings from all over the world, which cover 11 different sectors. The level of diversification helps to guarantee stable growth with low volatility.

In the last three, five and 10 years, the annualized growth of the price of the fund shares has constantly exceeded its net asset value (NAV).

Risks to consider

When looking at any action, it is important to consider the risks. While this trust has generally favorable reviews, that only does not mean that it is a good purchase. When it comes to investment trusts, risks tend to be related to the way the portfolio is balanced and managed.

Since JPMorgan American is very weighted towards US actions, an economic recession in the states would affect it. Along the same lines, any monetary fluctuation between the United States and the United Kingdom could have an impact on yields.

Despite these risks, I would be surprised if I had a performance lower than Rolls-Royce in the next five years.