Asia-Pacific is aging rapidly — especially China. One in four in the region will be over 60 years old by 2050, according to the United Nations. In China, authorities expect those aged 60 and over to jump from 280 million to more than 400 million by 2035 . That would be the equivalent of Britain’s and the U.S.’ current populations — combined. The social and economic implications of a silver economy are mostly negative, but there are some big opportunities for investors. CNBC Pro spoke to analysts to find out how to play the trend. Health-care tech and gear Tech is one major opportunity, according to Sandeep Rao, head of research at Leverage Shares, which sells exchange-traded products. “It bears noting that — in general — Asia’s ageing population isn’t nearly as resistant to using technology as ageing populations in other parts of the world have tended to be,” he told CNBC Pro. Rao named Hong Kong-listed JD Health International, an online health-care company, as a stock to watch because of its “rapidly growing presence” in online clinical assistance services. And Japanese health-care tech companies Sysmex and M3 are “very interesting bets,” according to Rao. He also likes Singapore-listed Raffles Medical as it has a dedicated division for equipment development and because its upmarket services make it “somewhat recession resistant.” Rahul Sen Sharma, managing partner of financial services firm Indxx, added, “Companies that are innovating in the healthcare sector, such as those specializing in wearables, telemedicine, genomics, and more, that cater to the needs of this demographic could experience significant growth.” He recommended the Global X Aging Population ETF , which includes not just health-care companies and pharmaceutical firms, but also wearables and medical device companies such as Cochlear, GN Store Nord and Teleflex. China’s ‘very promising bets’ Investors can look to focus on China’s aging population by market reach or income segment, according to Leverage Shares’ Rao. In terms of sheer market presence, mainland-listed Shanghai Pharmaceuticals and Topchoice Medical are “very promising bets,” he told CNBC Pro. As for investors looking to get exposure to China’s wealthier income segment, he named Raffles Medical, Asian Healthcare Specialists and IHH Healthcare — stocks that will also give similar exposure in other Asian countries. Dividend payers and financial services High-dividend-paying stocks as well as financial services are set to benefit from the aging population, according to analysts. The older cohort will increasingly prefer to receive dividends from their stocks to fund their consumption — instead of spending their capital gains, which means they will rotate more into stocks paying high dividends, according to King Fuei Lee, co-head of Asian equity alternative investments at U.K. asset management firm Schroders. “In a world that is rapidly ageing, the demand for dividends from the growing cohorts of retirees and soon-to-retire will underpin demand for dividend payers, making these stocks attractive investments on a longer-term basis,” he wrote in a March note. “Any investor who is looking for fast-growing companies with strong corporate governance in Asia will do well to pay heed to them,” he added. Another potential beneficiary of aging populations is financial services, according to Rob Clarry, investment strategist at wealth manager Evelyn Partners. As people live longer, they will likely need to save more to support themselves as cash-strapped governments are less likely to fund them, he said. “Not only does this create a significant tailwind for various parts of the financial services industry – investment management, platforms or pension providers – it may also influence the performance of financial markets themselves,” Clarry said. Health care and age-related diseases A greater number of people aged over 65 means more age-related diseases will need to be treated, Clarry said. Global health-care expenditure will reach 10.2% of global gross domestic product by 2030, up from 8.8% in 2018, he said, citing Organization for Economic Co-operation and Development data. Annual spending on nursing homes will rise by $325 billion by 2070, and spending on medicine and drugs will climb by more than $40 billion annually over the next 50 years — in light of an aging U.S. population, Clarry said, citing recent analysis from PGIM. Clarry recommends the Aubrey Global Emerging Market Opportunities fund, which is a play on growing consumption in emerging markets, mainly in India and China, where people are spending more not just on health care, but also food and wealth management services.
