AGEING POPULATION

Why ageing?

The 20th century was the stage for a major revolution: the demographic transition. Infant mortality rate dropped sharply and global life expectancy at birth gained 35 years in just over a century, while the fertility rate fell by nearly 50% per woman between 1950 and 2000.
If we follow the current demographic trend, the population aged 65 and over, which numbers 900 million people today, is expected to increase to 1.4 billion in the next ten years, and to 2.1 billion by 2050.

Many developed countries will be facing this phenomenon over the coming years or decades. In emerging countries, the population will get older at a much faster pace than it was the case for developed countries. By 2050, 80% of the elderly population will be in emerging countries with China being the first emerging country to face the “ageing challenge” as its retired population shall jump from 10% to 25% in the next 15 years.

1,6%

children per European woman
between 2010 and 2015

Birth and life expectancy in the world

Evolution of the senior population in the world

These segments allow us to benefit from numerous and various sectors exposed to this population. Then, we obtain a well-diversified investment universe including more than 600 stocks divided in eight sectors.

The universe we created provides considerable and significant benefits compared to the broader financial markets:

• Higher growth both in terms of sales and revenues;
• A more robust investment universe in terms of earnings slowing downward trends and accelerating upward trends.

To integrate the investment universe, a significant part of the company revenue must depend on the ageing population.

In developed economies, purchase power usually is at its highest by the time of retirement. Therefore, we constructed an investment universe through the prism of seniors’ consumption, taking account of two different sub-segments of the aged population: 

• The freshly retired have relatively high purchasing power; they want to look after their wealth and are also keen on well-being. 
• The elderly have needs that are  more oriented towards care and dependency.