global perspectives

A decade of healthy ageing

February 11, 2021

Henk Grootveld

Head of Trends Investing

The World Health Organisation (WHO) has proposed a ‘Decade of Healthy Ageing’ in a bid to tackle the challenges presented by an ageing population. These challenges also presents a variety of compelling investment opportunities.

This initiative represents a concerted global effort with regards to improving the lives of older people and their families. The United Nations General Assembly has, in turn, endorsed the idea and proclaimed 2021-2030 the ‘Decade of Healthy Ageing’. By the end of this 10 year period, the number of people aged 60 years and older is expected to have risen by as much as 34% higher. By 2050, there will be more than twice as many people above 60 as there will be children under the age of 5. This demographic transition stands to impact all aspects of society.

The older generation already face multiple barriers that prevent their full participation in society. Building a more inclusive society which can accommodate the needs of this rapidly growing demographic segment requires investment on an enormous scale. It is the opportunities presented by this requirement which form the basis of our Golden Age strategy.

The ageing society will have a large impact on multiple companies across multiple sectors

The ageing society will have a large impact on multiple companies across multiple sectors. By anticipating these impacts, we can identify long-term sustainable growth opportunities. For example, this development will undoubtedly have an impact on pension providers. An increase in the number of individuals eligible for state pensions will place more pressure on government budgets. Consequently the onus will increasingly be placed on the individual to provide for their own retirement. This has implications for businesses which can help those preparing for financial stability in retirement, such as wealth managers.

In the same vein, government healthcare budgets will become more strained. In the US, for example, healthcare spending has now reached 18% of GDP and costs are expected to grow by 5% every year this decade. Companies which can help alleviate this fiscal burden will grow in value. The European Commission has previously estimated that there is a 2:1 return on eHealth investment, referring to those companies which provide digital tools capable of increasing efficiency and efficacy, while lowering costs within the healthcare sector.

Similarly, we anticipate a greater focus on healthy living, as a means of maximizing the potential of the retirement period. Rising healthcare costs will contribute to greater emphasis being placed on the responsibility each individual has for their own health. A more active lifestyle, complete with healthier diets and greater degrees of self-care, will become the standard for those approaching retirement.

It is also worth noting the spending power of older individuals is also growing at a much faster pace than their contemporaries. The economy of the population over 50 in Europe alone currently represents the third largest economy on earth, for example. This has potential ramifications for the consumer spending sector and especially trusted brands which are valued by this demographic.

The UN notes that a decade of concerted global action on healthy ageing is urgently needed, and that the COVID-19 pandemic has only served to highlight essential gaps in policies, systems and services. We fully support this initiative and recognise that companies that effectively cater to the older generations and help them lead longer, healthier, more fulfilled, and financially independent lives have an opportunity to grow faster than the broader market, and on a more sustainable basis.

Read more about the Decade of Healthy Ageing

Read more about our Golden Age strategy

important information.

This document has been issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.

Lombard Odier Investment Managers (“LOIM”) is a trade name.

This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.

Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.

Source of the figures: Unless otherwise stated, figures are prepared by LOIM.

Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.

No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Funds (Europe) S.A prior consent. ©2021 Lombard Odier IM. All rights reserved.