The site you are about to enter is intended for Australian wholesale clients only (as that term is defined in section 761G of the Corporations Act 2001 (Cth)) and is not intended for distribution to, nor should it be relied upon by, retail clients. Newton Investment Management Limited (Newton) is authorised and regulated in the UK by the Financial Conduct Authority (FCA). Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Corporations (Repeal and Transitional) Instrument 2016/396, a copy of which is on the website of the Australian Securities and Investments Commission, www.asic.gov.au. The Instrument exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia. This information is made available by Newton Investment Management Limited and BNY Mellon Investment Management Australia Ltd (AFSL 227865).
By using this website I also confirm that: I accept the Terms of Use and I agree to comply with them – View our Important information I accept the BNY Mellon Privacy Policy and I agree to comply with it – View the BNY Mellon Privacy Policy I accept and consent to the use of cookies and analytics – View our Cookie Policy
Populations are changing all over the world, in a host of different ways. How do these changes affect our investment decisions?
Demographic disturbances
Populations are shifting significantly. Unprecedented ageing is occurring in mature economies, income growth is driving changes in developing countries, and rapid urbanisation is driving increased demand for infrastructure, housing and services. This creates structural growth opportunities in certain areas, though there are also pronounced risks from growing fiscal burdens. Changing patterns of labour participation, such as education later in life and the growing proportion of women in the workplace, also contribute to these shifting dynamics.
Age of the aged
Improved medical technology, combined with lower birth rates, means that populations in many developed countries are ageing. In fact, 2018 was the first year in recorded history where people aged 65 and older outnumbered children under the age of five.
Ageing populations pose a number of issues for countries, including the challenges of funding social and medical care and providing pensions that span these much longer retirements to so many people, all from income generated from a (proportionally) smaller working population.
Additionally, the elderly have different spending priorities and needs, so the consumer, health-care and housing sectors may all be affected.
The emerging consumer
In many emerging economies, the population changes look quite different. The rapidly growing middle class in Asia is changing the consumer sector significantly, along with having profound implications for our planet. It will be a challenge to support the billions of Earth’s inhabitants under any circumstances, let alone when millions more people are hoping to live lives defined by convenience, choice and consumption.
With rising incomes comes a growing desire to live in urban centres, hence why many of these same countries are seeing rapid urbanisation. These ideas are captured by our population dynamics theme, which we think is crucial for understanding the complex world in which we live and invest.
Transcript
Populations are shifting significantly, with unprecedented ageing in mature economies and income growth driving changes in developing economies. This leads to differences in growth and fiscal burdens. ‘Population dynamics’ explores what shifts in demography mean for investors.
Meet the team
We have a research group for each theme, made up of analysts, portfolio managers and other members of the investment team, that collaborate on new thematic ideas and analysis. Here are the co-leaders in the population dynamics theme group.
Ed Geall
Thematic analyst
Ilga Haubelt
Head of Equity Income
Laura Sheehan
Global analyst, cyclicals
Our key areas of focus
Ageing populations
The developed world is exhibiting ageing population after 50 years of benign demographics. This will drive demand for products for the elderly – both consumer and financial. Government spending on pensions and health care will rise, and this represents a fiscal challenge to many countries.
The growing labour force in emerging markets
Demographic changes are driving labour-force growth in many emerging-market countries, which can support economic growth in countries able to employ this greater pool of labour, but might lead to social unrest in countries that are unable to make use of new workers. Rising employment supports the number of people entering middle-income groups, in turn driving growth in consumer segments.
Education
Closely tied with changing demographics is an increase in focus on education, including re-education of the workforce as working age is extended.
Urbanisation
The percentage of populations living in cities is rising. Rapid urbanisation is a feature of both developed and emerging markets, and will drive growth in demand for infrastructure, housing and services.
A deep dive into…
Megacities
The urbanisation phenomenon – essentially the migration of people from rural to urban areas – continues to play out in emerging economies, and has a strong statistical relationship with income gains.
In many mature economies, populations are ageing, which has serious implications for health-care services. The economic impact of ageing populations is a key consideration of our healthy demand theme.
As the world’s population gets bigger and richer, our planet will struggle to keep up with demand. Earth matters considers the impact of environmental issues on the economy.
Individual Investors will be redirected to bnymellon.com
This is a financial promotion. Issued by Newton Investment Management Limited, The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England No. 01371973. Newton Investment Management is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN and is a subsidiary of The Bank of New York Mellon Corporation. Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Class Order 03/1099, a copy of which is on the website of the Australian Securities and Investments Commission, www.asic.gov.au. The Class Order exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia.
Material in this publication is for general information only. The opinions expressed in this document are those of Newton and should not be construed as investment advice or recommendations for any purchase or sale of any specific security or commodity. Certain information contained herein is based on outside sources believed to be reliable, but its accuracy is not guaranteed. You should consult your advisor to determine whether any particular investment strategy is appropriate. This material is for institutional investors only. Past performance is not a guide to future performance. Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.
This material is for Australian wholesale clients only and is not intended for distribution to, nor should it be relied upon by, retail clients. This information has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should carefully consider, with or without the assistance of a financial adviser, whether such an investment strategy is appropriate in light of your particular investment needs, objectives and financial circumstances.
This information is made available by Newton and BNY Mellon Investment Management Australia Ltd (AFSL 227865). This information is confidential and is only provided to Australian wholesale clients (as that term is defined in section 761G of the Corporations Act 2001 (Cth)). This is not an offering or the solicitation of an offer to purchase an interest in any financial product referred to in this website. This content is for general purposes only and should not be relied upon as financial product advice. This content has been prepared without taking into account the objectives, financial situation or needs of any person. Before making an investment decision an investor should consider the appropriateness of the information in this website having regard to these matters and read the disclosure document relating to a financial product. Investors should also consider obtaining independent advice before making any investment decisions. Investments can go up and down and to the extent that this website contains any past performance information, past performance is not a reliable indicator of the future performance of the relevant investment or any similar investment strategy.
Newton Investment Management Limited is exempt from the requirement to hold an Australian financial services licence in respect of the financial services it provides to wholesale clients in Australia and is authorised and regulated by the Financial Conduct Authority of the UK under UK laws, which differ from Australian laws.