Data confirm populations in some of the world’s largest economies are getting older, a theme that brings with it ample investment opportunity. One avenue for harnessing that theme is with the ETF Global X Longevity Thematic ETF LNGR (LNGR ).
LNGR, which turns three years old in May, follows the Indxx Global Longevity Thematic Index. The ETF “seeks to invest in companies positioned to serve the world’s growing senior population through exposure to health care, pharmaceuticals, senior living facilities and other sectors that contribute to increasing lifespans and extending quality of life in advanced age,” according to Global X.
Traditionally, the idea of investing around the aging population theme has involved tapping the healthcare sector, but LNGR goes beyond standard healthcare ETFs, which are usually heavily focused on pharmaceuticals stocks. LNGR allocates over 36% of its weight to healthcare equipment stocks.
Industry observers argue that medical technology companies can tap into increased healthcare spending among emerging economies while the U.S. market has matured and could experience slower growth. Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020.
LNGR ETF Potential
LNGR’s overweight in medical device and equipment stocks could benefit investors over the long-term.
“As aging societies develop new care requirements, medical device companies also stand to benefit,” according to Global X research. “Demand for senior assistance tools like walkers and pacemakers, and even new technologies like wearables and robot assistants, are expected to grow substantially. While wearables have captured the attention of younger generations, there are ample use cases for seniors, such as monitoring their health or contacting emergency services.”
Pharmaceuticals and biotechnology names are integral parts of the LNGR thesis, combining for over 42% of the ETF’s roster.
“As more people age, there will simply be greater demand for treatments, both old and new, to prevent, mitigate and ideally cure such diseases. Innovations in technology and biotech research, including the use of genomic data and bioinformatics for personalized care, can offer further solutions in this space,” according to Global X.
LNGR is up 13.26% year-to-date, an advantage of 6.13% over the S&P 500 Health Care Index.
For more ideas on thematic ETF strategies, visit our Thematic Investing Channel.