As medical technology continues to advance, it’s helping to prolong life, which will increase the aging population. There’s a common misconception that an aging population will be detrimental to economic growth, but that couldn’t be further from the truth—a plus for a certain exchange-traded fund that capitalizes on the aging population.
“There are roughly 117.4 million people over the age of 50 in the United States, of which about 52 million are over the age of 65,” an Aspen Times article said. “By 2060, the American Association of Retired Persons (AARP) "estimates that about 95 million":https://www.aarp.org/content/dam/aarp/research/surveys_statistics/econ/2020/impact-of-age-discrimination.doi.10.26419-2Fint.00042.003.pdf Americans will be over the age of 65.”
“Some economic analysts view an aging population as a detriment to economic growth, but positive factors among an aging population such as longevity, valuable work experience, and a continued desire to work could actually mean the opposite,” the article added.
“There is the concept that the older adult population declines in their value to society, and this is untrue,” said Lee Tuchfarber, CEO of Renew Senior Communities. “That is an entrenched belief, but the script ought to be flipped. People want to contribute to society no matter what age they are.”
One fund to take advantage of these growing trends is the Global X Longevity Thematic ETF (LNGR ). LNGR seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Longevity Thematic Index.
The fund invests more than 80% of its total assets in the securities of the underlying index. The underlying index is designed to provide exposure to exchange-listed companies in developed markets that facilitate the demographic trend of longer average life spans and the aging of the global population, including but not limited to companies involved in biotechnology, medical devices, pharmaceuticals, senior living facilities, and specialized health care services.
A Pure Play on Biotech
While LNGR has biotech exposure, investors looking for more of a pureplay biotech fund can check out the iShares Nasdaq Biotechnology ETF (IBB ). IBB seeks to track the investment results of the NASDAQ Biotechnology Index, which contains securities of companies listed on NASDAQ that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals and that also meet other eligibility criteria determined by Nasdaq, Inc.
The fund generally invests at least 90% of its assets in securities of the index and in depositary receipts representing securities of the index. It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents.