19 August 2015

The advantages of an Ageing World

It’s been dubbed the ‘Age War’. We’re now living longer than ever before thanks in large part to advances in healthcare and the adoption of healthier lifestyles. Our ageing population – both here and globally, will have a far-reaching impact across all areas of our lives, bringing with it some real investment opportunities.

At its core, demographic changes alter the fabric of our society; significantly disrupting our cultural, social and business environments. An ageing population combined with low fertility rates is forcing people away from relying on government and family assistance; turning instead to financial markets to fund their own retirement.

Income products are becoming an interesting investment solution, with good capital growth potential. Given that the draw down phase in retirement may last 30 years or more, having a product that can provide modest and conservative growth through the market cycle (both capital and income) is important for offsetting the impact of inflation over that period.

Healthcare is a significant investable area benefiting from an ageing population. The number of wearable medical devices on the market – which can offer early warning signals for those with acute medical conditions – is projected to increase. High smartphone ownership amongst the target group has helped the introduction of these devices.

As a result, pharmaceutical companies have been able to put this information layer on top of their research process. AstraZeneca, the world’s fifth largest pharmaceutical company has 14 cancer drugs that are in a relatively advanced state of development. It’s believed that AstraZeneca’s three leading oncology medicines will experience peak sales potential of over $12 billion in the next few years, which will significantly contribute to their revenue.

Other sectors expected to benefit from an ageing population include regenerative health, seniors care facilities and grey tourism.

The significance of demographic change over time remains undisputable – but just how quickly we’ll start to see these changes is harder to predict.

 

Important information: The content of this publication are the opinions of the writer and is intended as general information only which does not take into account the personal investment objectives, financial situation or needs of any person. It is dated June 2015, is given in good faith and is derived from sources believed to be accurate as at this date, which may be subject to change. It should not be considered to be a comprehensive statement on any matter and should not be relied on as such. Neither Zurich Australia Limited ABN 92 000 010 195 AFSL 232510, nor Zurich Investment Management Limited ABN 56 063 278 400 AFSL 232511 of 5 Blue Street North Sydney NSW 2060, nor any of its related entities, employees or directors (Zurich) give any warranty of reliability or accuracy nor accept any responsibility arising in any way including by reason of negligence for errors and omissions. Zurich recommends investors seek advice from appropriately qualified financial advisers. Zurich and its related entities receive remuneration such as fees, charges and premiums for the financial products which they issue. Details of these payments can be found in the relevant fund Product Disclosure Statement. No part of this document may be reproduced without prior written permission from Zurich. KJUC-010434-2015
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