Fund manager Fidelity will bring its Global Demographic Fund to Australia, with plans to launch it in the local market in December.
Fidelity’s London-based fund manager, Nicky Stafford, addressed a lunch for Sydney investors yesterday and outlined the fund’s investment strategy in 50 to 80 global stocks out of an investment universe of 1000 stocks, based on long term changes in population, consumption and wealth dynamics.
“The change in demographics is the single most important investment theme for our time, and we think the fund has a unique and focused strategy,” said Stafford.
Winners of today and tomorrow
“Populations are getting bigger, older and wealthier, and emerging markets – which will have 88 per cent of the population by 2015 – are also becoming more affluent.”
The fund looks at which stocks are “winners of today” and which will be the “winners of tomorrow.”
One winner of tomorrow is Colgate-Palmolive, which is number one in toothpaste markets in developed economies and is well placed for growth as more affluent populations in emerging economies increase the use of toothpaste.
Winners of tomorrow include Nigerian Breweries, which is set to benefit from the growth of an economy where 40 per cent of people were under 14.
Endologix, a US-based manufacturer of medical stent technology is also in this category, as it is producing a product used in the treatment of aortic aneurism disease, a major cause of death for the over-55s in the US.
The lens of demographics
Stafford said she believed that the “lens of demographics” could deliver sustainable growth to a fund that is not focused on short-term quarterly results, but the long term.
“The younger generation will take their habits – good and bad – with them through life as they get older,” she said.
“This ranges from the internet to a propensity for diabetes. We believe that understanding these drivers will be the key to a successful fund.”