How to cash in on the rise of the pensioner
OUR ageing population is creating new opportunities for investors, as more older people create greater demand for healthcare innovations.
The number of people in the UK aged 100 and over doubled between 2002 and 2016.
Latest figures from the Office for National Statistics show there are almost 15,000 centenarians in the country, while the number of people aged 90 and over has hit a record high of 571,245.
And this is not just a UK trend. In Japan, more than 30pc of the population is already 60-plus. The World Health Organisation (WHO) estimates that by 2050 there will be 2bn people aged 60 and over.
Anthony Rayner, co-manager of the Miton Cautious Monthly Income fund, says: ‘The good thing about demographics is that they’re predictable. Older people are going to need more help with their health, and if you combine that with technological advances, there are powerful investment opportunities.’
Global spending on health as a proportion of GDP was 9.9pc in 2014, according to the WHO. That is only set to rise as the populations of emerging markets such as China and Brazil become increasingly wealthy and health-conscious.
Already, around a third of so- called silver spending is health-related. That’s not surprising when you consider around a quarter of people over 65 are diabetic, a quarter of deaths in this age group are cancer-related and 25pc of the demographic will suffer a cardiovascular illness.
Dani Saurymper, manager of the Axa Framlington Health fund, likes the US business Edwards Lifesciences, which is a leading innovator in heart valve replacements.
The fund also invests in Insulet, a US maker of disposable insulin pump patches which helps diabetics avoid having to inject themselves by monitoring their blood sugar levels on a handheld device that also adjusts the amount of insulin being administered through a thin tube.
Rayner, whose fund is up 34.2pc over three years, is a fan of hearing aid manufacturers such as the Australian firm Cochlear and Italian group Amplifon.
He also rates Japanese business Unicharm, which is the leading provider of adult incontinence pads – one of the biggest-selling wellness items among older people.
Saurymper, whose fund has returned 46pc over three years, is also interested in care homes. ‘There simply aren’t enough beds to meet demand,’ he says.
He likes French provider Orpea, which is expanding in Europe, Brazil and China.
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Mahoney, manager of the Polar Capital Healthcare Opportunities fund, says: ‘I think we’re going to see the emergence of more products to keep people healthy in the first place – prevention rather than cure.’
This trend is already starting to emerge through insurers which reward customers who achieve exercise goals with Fitbit-style devices.
Mahoney, whose fund is up 60.5pc over three years, also invests in a private company which is developing devices that can be fitted in the user’s artery to monitor blood pressure. He says: ‘ Some of the technology you will be able to wear on your wrist in five years’ time will be better than the technology used in hospitals today.’