Sectors to benefit from an aging world

In a recent report from Merrill Lynch’s Office of the CIO, Ashvin Chhabra and his team highlighted the ever-increasing spending power of the “silver dollar” generation. With an aging global population being driven by increased life expectancy and lower birth rates, companies are repositioning strategies to cater for this over 50 demographic. The report explained that in the US the silver dollar generation account for about 80% of personal net wealth and have an estimated spending power of over $7 trillion. For investors, this aging trend could spell opportunities in health care products and services, as consumer expenditure shifts. In the U.S., the average senior spends over 200% more on healthcare than the typical individual. Another interesting opportunity Merrill Lynch see for investors is in the home improvement industry. “In the U.S., 83% of seniors say they want to stay in their home as they grow older. As members of the Silver Dollar generation strive to do so, their share of home renovation spending, already 50%, stands to grow larger” (see Exhibit 2 below). (VIEW LINK)

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