This presents challenges for governments and individuals in funding longer retirements, as working age populations decline.
On the downside, Peers comments: “Countries with an ageing population and an underfunded health and pension system may see their credit ratings deteriorate, leading to higher financing costs for them and a lower return for those investors financing them.”
King says: "It is easy to assume the negative view, that an ageing population will drag down economic growth, and more government budget will be spent on pension commitments challenging fiscal spending more generally."
But she sees the bright side: "Ageing populations may be healthier, due to healthcare reform and a better understanding of health and wellness.
“Increased and healthier life expectancy has implications for the percentage of working-age population; if the new mid-life crisis at 50, then people work for longer and retire for longer."
According to her, this has implications for investors following economic growth, consumption trends, and medical care, as ‘cradle to grave’ is “meaningfully extended”.
For example, within the Aegon Diversified Monthly Income Fund, there are "notable allocations to healthcare and pharma", which benefit from this demographic trend.
Carol Ward, head of solutions for the Man Group, says: "There are obviously sector tilts that can be made to acknowledge the facts of a world that is ageing and reshaping itself."
This could be healthcare and senior-focused housing in those countries with ageing populations, or tilts towards tech firms that are designing products to step into the gaps left in the workforce.
She adds: "[It could also mean tilts to] consumer products and cyclicals in the countries that are positioned to see strong demographic-driven growth in the coming years."
Migration, climate and population growth
Migration and population growth are huge issues, according to the UN Migration report.
Overall, the total estimated 281mn people outside their countries of birth in 2020 was 128mn more than in 1990, and over three times the estimated number in 1970.
This has led to challenges for governments in terms of infrastructure, as well as opportunities in terms of economic contribution to the workforce, especially in traditionally blue-collar jobs.
What is causing this? Largely, wars and the climate.
For example, the war in Ukraine caused spikes in migration west-wards within Europe, not forgetting Syria and Afghanistan in recent years.
Then there's the climate. International thinktank the IEP predicts 1.2bn people could be displaced by 2050 due to climate change and natural disasters.
For example, the Horn of Africa is facing the worst food crisis seen in 40 years. With 150mn people affected in this region, agencies such as the British Red Cross have highlighted migration driven by famine and adverse climate as a reason for concern.
