Some speculated that the blockade would bring a boom to American births, as couples were forced to stay home when the coronavirus pandemic first broke out in early 2020. Census data show that US population growth slowed in 2020 and slowed further last year, the slowest pace in 246-year history. Since 1937, the country’s population has grown by less than a million due to lower birth rates, higher deaths from Covid-19, and lower immigration. “The big story is that the United States virtually eliminated population growth last year,” William Frey, a veteran demographer and senior researcher at the Brookings Institution, said in an interview. The Covid-19 pandemic has accelerated what has been the most important demographic trend shaping our seeds in recent decades: declining birth rates around the world. The average family had five children in 1952. Today, that number is now under the age of three and is declining. In the United States, the baby boomers born between 1946 and 1964 are aging and retiring, while the younger generation, including millennials, are not breeding so rapidly and the proportion of women giving birth is shrinking. Frey said. The combination of declining babies and extended lifespan (except for the recent Covid impact) means that the US population is aging, as is the case in most other parts of the globe. Even the previously high-growth regions of Latin America and Asia are slowing. Only Africa has a higher fertility rate than 2.1 per maternal turnover rate. “Our Gray Future” According to the United Nations, the world’s population is projected to grow from 7.7 billion in recent years to 9.7 billion by 2050, reaching about 11 billion by 2100. Researchers at the University of Washington predict a much earlier peak of 9.7 billion people by 2064, after which the population will decline, thanks to more positive assumptions about fertility decline. Taimur Hyat, Chief Operating Officer of PGIM, Prudential Financial’s Asset Management Division, said: “In developed countries, there are more people aged 65 and over than under 15. By 2040, there will be more people aged 65 and over than under 10 in the world, including developing countries.” , Has a significant impact on the United States and all other countries. Consider Italy and Japan for a glimpse of our gray future. In Italy and Japan, the elderly are already ahead of the youth and the workforce is declining. By 2060, one in four Americans will be 65 or older, the number of people over 85 will triple, and the number of people over 100 will increase by 500,000, according to the U.S. Census Bureau. That is. According to Frey, in a low or zero immigration scenario, the workforce could stagnate or decline by 2035. According to Hyat, the aging of the population is progressing faster in emerging markets than in developed countries, thanks to China’s limited reproductive policy history and India’s rapid aging population. By 2050, he said, at least 80% of the world’s more than 65 population will enter emerging markets. Dealing with Worker Shortages An ever-increasing subset of professional investors are focusing on themes related to these trends. For example, Alan Patricof, a veteran venture capitalist who founded Apax Partners, founded a technology-focused fund for older Americans in 2020. Even investors who haven’t explicitly targeted the so-called baby boomer silver tsunami cite demographics as a tailwind. One such company, the early venture capital firm TSCV, focuses on health technology and so-called deep tech companies working in artificial intelligence and robotics. Silicon Valley-based company’s previous hits include seed stage investments in Zoom and Carta. A key theme of TSCV investment is innovation to address the imminent labor shortage. According to partner Spencer Greene, they have invested in start-ups that use AI to automate precision manufacturing of electronics and autonomous driving technology for long-distance trucks. The other is to help improve the efficiency of the medical process. “You can see what happened in Japan,” Green said. “In the next 50 years, developed countries are heading for it.” According to two large reports released last month, demographic trends have forced Bank of America institutional investors to move their global equity teams. We researched and created a list of 50 stocks that will generate more customers and revenue in the aging world. For example, AMN Healthcare provides staffing and consulting services to US healthcare facilities, which are in increasing demand as Americans age. The fact that the US population and the world’s population will look very different after 20 years will create significant headwind and tailwind factors for certain sectors. According to researchers, PGIM Taimur Hyat’s CEO financial names include emerging market-focused life and health insurer Prudential, and global investment banks JPMorgan Chase and UBS. Regarding real estate, we recommended Well Tower, a real estate investment trust that targets healthcare real estate and invests in approximately 1,400 facilities including elderly homes and nursing homes in the United States, Canada, and the United Kingdom. We also named it UDR, another REIT that owns and operates more than 52,000 apartments in communities across the United States. He also quoted DR Horton, one of the largest homebuilders in the United States. This tends to focus on first-time buyers and those looking to upgrade in the west. , Southeast and South Central states. The investment bank has also nominated Progyny to provide birth allowances to employers. According to Bank of America, the growing need for temporary workers amid a shrinking workforce could help dispatched labor and professional service providers ASGN. We also nominated Freelancer Marketplace Upwork as a beneficiary. Longer lifespan Over the next few decades, human lifespan is expected to grow gradually. According to German consultancy Roland Berger, the average person born in 2020 has a lifespan of 72.3 years and could reach 76.8 years by 2050. However, according to PGIM’s Aging Report, breakthroughs in cancer treatments and longevity medicines could further extend life expectancy. If anything, according to Hyat, one of the authors of the 2016 report, demographers in the past have consistently underestimated longevity growth. “The fact that the US population and the world’s population will look very different in 20 years will create significant headwinds and tailwinds in certain sectors,” Hyatt said. According to the World Data Lab, seniors will manage spending of about $ 8.4 trillion in 2020, which will grow to $ 14 trillion over the next decade. According to Hyatt, older people’s spending patterns are “dramatically different” than young people. Millennials often go to restaurants and spend more on education and clothing, but older people tend to spend much more on elderly housing with care, hospitals, medicines, and much less on cars and education, he said. .. He said these assumptions underpin PGIM’s investable ideas. According to asset managers, housing demand will increase in places where people over the age of 65 are already concentrated, such as Florida and New England. According to research firm Senior Housing Analytics, the need for new senior housing units in an independent care community or supportive care community is expected to increase by 850,000 units for older cohorts. According to PGIM, rents in the elderly housing community tend to be more stable than regular apartments due to high occupancy and demand, and the asset class is relatively isolated from the recession. Healthcare costs were projected to rise from about $ 3 trillion in 2016 to $ 5 trillion by next year, according to asset managers. According to the company, people over the age of 85 spend twice as much medical care as people aged 65 to 84, and people aged 65 to 84 spend twice as much as a cohort aged 45 to 64. There is. “It makes sense for investors to dig deeper into the areas that cause death in the elderly. Therefore, it is very relevant for cancer, lung disease, Alzheimer’s disease, pneumonia, kidney infections, Parkinson’s disease, and dementia and stroke. It makes sense to focus on biotechnology companies that are coming up with targeted treatments, “Alzheimer’s disease.” London-based investment company J. Stern & Co. According to Christopher Rossbach, medical device manufacturers are also ready to benefit. He has nominated companies such as Becton Dickinson, Medtronic and Thermo Fisher Scientific. Opportunities related to “silver tech” from real estate are investments in real estate that biotechnology start-ups and medical companies rely on, which are usually outside research centers near universities, PGIM said. .. It can be an office space in or near Boston, San Francisco, San Diego, Seattle, and Raleigh, Durham, NC. “Lab space competition is fierce and vacancy rates are low, helping Boston become one of the largest and most expensive US markets for life sciences companies,” according to a PGIM report. Another area of growth is the “Silver” startup, which creates apps and hardware that help older people live more independently, stay connected with society and caregivers, and deal with cognitive decline. Tech category. “We are finding a variety of opportunities for primary care, such as personal emergency response,” he found a device that could detect falls and a gadget that encouraged older people to take medicine. “This trend is being accelerated by pandemics given the need for telemedicine.” But aging is not a monolith. According to Amran Roy, a former demographic researcher at Creedy Switzerland and State Street, who published the book “Understanding Demographics” this year, age is characterized by several characteristics, including education level, geography, and wealth. It is one. “There are more than 80 of the world’s fastest growing retirement segments,” Roy said in an interview. “But Japan’s 80-year-old is different from Italy, France and Germany’s 80-year-old. It’s important to understand that.” He has helped create demographic ETFs for 20 years on Wall Street. Roy said there are some broad opportunities related to aging in the medium to long term. They include medicines and biotechnology, as diseases such as Alzheimer’s disease and Parkinson’s disease are afflicting more Americans. Leisure and luxury services for the wealthy seniors, and financial services that help raise retirement benefits, with a focus on women who tend to live longer than men. Soaring medical and pension costs can stress the government and at the same time reduce tax burdens by reducing labor force participation. According to Frey of the Brookings Institution, solutions include encouraging more workforce participation by older people and women and encouraging immigrants. “There will be a lot of pressure to take care of all these older people,” Frey said. “Long-term care, safety, medicine, etc. are all important because more and more people will not be able to take care of themselves.”
The world is growing old at a rapid pace. Here are ways to invest
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