Looking at trends and data can be a helpful strategy to project the success of thematic ASX ETFs.
Recent trends have seen big returns in sectors like tech and financials.
If you were exposed to these sectors before the last couple of years, you would likely be sitting pretty today.
One important piece of data I am aware of, is Australia's ageing population.
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Looking ahead
Data from the Australian Bureau of statistics shows in 2020, there were an estimated 4.2 million older Australians (aged 65 and over) – comprising 16% of the total Australian population.
In the next 30 years, this number is projected to increase to more than 20%.
Essentially, one in five Australians will be over the age of 65.
Why is that the case?
Firstly, advances in healthcare, medical technology, and living standards mean Australians are living longer.
Secondly, the baby boomer generation (born between 1946 and 1964) is progressively reaching retirement age.
As this large demographic group moves into the 65+ age bracket, it significantly increases the overall percentage of older Australians.
What does this mean for investors?
When we project this data for the long term, it makes me aware of the enormous demand for several key sectors in the decades ahead.
One key area that is set to benefit is the healthcare sector. As we age, the demand for healthcare services increases.
Some key ASX listed stocks that could be set to benefit include:
- CSL Ltd (CSL): Global leader in blood plasma, vaccines, and biotherapies.
- Cochlear Ltd (COH): Implants for hearing loss, common in older adults.
- ResMed Inc (ASX: RMD): Sleep apnea devices, increasingly used by ageing populations.
- Ramsay Health Care Ltd (ASX: RHC): Operates private hospitals across Australia and globally.
- Healius Ltd (ASX: HLS) and Sonic Healthcare Ltd (ASX: SHL) Pathology and diagnostic services.
Other key companies to monitor are those in the pharmaceuticals & biotechnology space, aged care & retirement living and wealth management.
These areas all play an important role in caring for older Australians.
Which ASX ETFs give exposure to these sectors?
While these individual stocks may have plenty of upside, there are thematic ASX ETFs that combine hundreds of these options into one fund.
An ageing population is not a unique problem only here in Australia.
In fact, the World Health Organisation recently revealed life expectancy at birth reached 73.3 years in 2024, an increase of 8.4 years since 1995.
The number of people aged 60 and older worldwide is projected to increase from 1.1 billion in 2023 to 1.4 billion by 2030.
Global X S&P Biotech ETF (ASX: CURE)
This fund seeks to invest in companies that potentially stand to benefit from further advances in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics, and biotechnology.
It is made up of roughly 124 holdings, with no individual company representing more than 3.3% of the fund.
iShares Global Healthcare ETF (ASX: IXJ)
The index is designed to measure the performance of global biotechnology, healthcare, medical equipment and pharmaceuticals companies and may include large, mid or small-capitalisation stocks.
Its largest holdings include Eli Lilly, Johnson and Johnson and ABBVIE Inc.
It also includes a small exposure to Australian companies in this sector.
BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG)
DRUG WTF aims to track the performance of an index (before fees and expenses) that comprises the largest global healthcare companies (ex-Australia), hedged into Australian dollars.
At the time of writing it provides access to 59 of the world's leading healthcare companies, such as Johnson & Johnson, Pfizer and Roche, in one trade.
