Ageing and Lifestyle
What is the Ageing & Lifestyle theme?
Ageing and lifestyle describes the changing ways that people are living across the globe as life expectancies rise. Ageing populations are one of the greatest social, economic and political transformations of our time.
For example, the global 60+ cohort is forecast to grow more than five times as fast as the under-60 population from 2018-20301, creating challenges and opportunities for governments, companies and individuals alike:
Percent change in global population size (estimate), 2018-2030.
Source: U.S. Department of Commerce
What are the potential benefits of the Ageing and Lifestyle theme?
The investible opportunities of ageing populations extend far beyond the obvious areas of healthcare. The changing lifestyles and needs of older generations could represent a multi-decade growth opportunity for investors. By 2030, two-thirds of over-60s’ consumption growth in developed markets will be spent across multiple industries dedicated to living well, from beauty and fitness, to travel and entertainment 1.
Meanwhile other industries like real estate, financials and healthcare will have to rapidly adapt to retiring and elderly generations’ needs.
We invest in companies operating across four areas associated with the economic implications of longevity:
- Silver Spending: Industries dedicated to living well; beauty/aesthetics, personal care, fitness, housing, travel, leisure and entertainment.
- Treatment: Companies seeking sustainable treatment solutions for the coming generations.
- Wellness: The wellness industry includes preventative medicine, personalized treatments, nutrition, beauty and anti-ageing treatments.
- Senior Care: Markets for senior housing and specialist assisted living facilities, such as Memory Care that focuses on dementia patients.
Why do ageing populations matter for investors now?
1. We have reached a tipping point of ‘peak youth’ – the global number of adults aged 65+ now outnumber children under 5.
Source: UN as at March 2018
2. Living longer naturally incurs higher healthcare costs; preventing and treating age-related chronic diseases will be key driver of healthcare spending over next five years. 10,000 Americans hit the age of 65 every day, at which point personal healthcare spending doubles (US Dept for Medicaid).
Healthcare spendings by age
Source: US Centers for Medicare & Medicaid Service. Latest data available at May 2018.
3. The retirement savings gap will grow 5% a year from 2015-2050 – that means an additional $28bn of deficit each day, according to the World Economic Forum. The increasing onus for individuals to save for, and enjoy, longer retirements gives wealth managers opportunity in an underpenetrated market: 52% of global wealth is held by over 50s but only 26% of retirees globally have ever used a professional financial advisor (HSBC)
Post-COVID-19, innovation in healthcare is here to stay
As the coronavirus pandemic has developed, we have been inspired by the coordinated response of healthcare providers, diagnostic testing companies and the biopharmaceutical industry.
How COVID-19 might impact the longevity economy
Healthcare has come under the spotlight during the coronavirus pandemic, as the sector is seen as a key part of the solution to global health emergency.
China: Coping with a Silver Society
China’s population is getting older at a speed and scale the world has never seen before.
Forecast to grow 10-15% annually until 2025*, the robotics industry is rapidly changing how we live and work
Just 9% of retail transaction are made online today, which will likely grow as smartphone adoption rises globally*
Huge demographic and environmental changes are forecast to make CleanTech a $1.3 trillion market by 2020*
The growth of the global middle class is at a 150-year high, boosting consumption in Asia and the developing world*
1. Source: All data from the United Nations, correct as at January 2019.
*Automation - IFR World Robotics Report 2017, latest available data as of March 2018.
*Connected Consumer - Citi Research, Citi GPS “Technology at work v3.0”, August 2017
*Ageing & Lifestyle - US Department of Commerce, latest data available as of March 2018
*CleanTech - Financier Worldwide, “Investing in the clean technology revolution”, January 2016
*Performance Drivers - AXA IM, correct as at 29 December 2017
Not for Retail distribution: This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. References to league tables and awards are not an indicator of future performance or places in league tables or awards and should not be construed as an endorsement of any AXA IM company or their products or services. Please refer to the websites of the sponsors/issuers for information regarding the criteria on which the awards/ratings are based. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.
Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.
Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX.
In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.