Dexia Asset Management (Dexia AM) in its latest research said that the emerging demographic trends of growing and ageing population are set to hugely impact the investment opportunities globally.
Dexia AM on Sunday announced the findings of its latest research paper Demography: Challenges and Opportunities in a Changing World.
The paper has examined the global challenges resulting from the two major demography trends of growing and ageing populations. It has five pillars of business opportunities and solutions that will create both values for investors, along with sustainable benefits.
“Growing and ageing populations are having significant consequences on a variety of aspects of life – from the composition and skills of the global workforce, to the consumer base and the natural environment. Companies that can adapt to these conditions will not only create commercial advantage, but also sustainable benefits for the markets they serve,” said Sophie Deleuze, Senior SRI Analyst at Dexia AM.
The five specific demographic-driven changes that Dexia AM believes will offer significant potential business opportunities in the future are skills shortages, greater demand for basic and essential goods and services, wealthier consumers, ageing populations and increasing pressure on resources and the environment. Related to each of these changes, Dexia AM has identified business opportunities to offer solutions targeting the needs of companies and individuals, with a focus on those presenting sustainable benefits.
Demographic trends are complicated affairs and have a multitude of knock-on effects, for example, skills-shortages, to new consumer needs, to issues of resource scarcity and environmental degradation. In the identification and selection of companies, major growth and opportunities appear to be much more prevalent among small and medium sized companies compared to larger Caps. For the most part, the market appears to have already integrated demographic trends into company valuations and growth prospects of companies which are well-aligned to provide business solutions. However, there are still opportunities available to invest in companies with lower valuations and promising growth potentials. To identify these opportunities requires a thorough understanding of the far-reaching impacts and regional variances of demographic trends, together with comprehensive analytical frameworks.
“As the challenges brought by growing and ageing world populations are not going dissipate any time soon, the ability to recognise different investment opportunities and to act on them will be imperative for investors,” added Stephanie Dunn, Senior SRI analyst.