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European investors focus on the healthcare sector in light of demographic shift

According to research by BNP Paribas Asset Management, European investors have turned to "significantly attractive" prospects in the healthcare sector as a result of demographic changes worldwide.

Healthcare was found to be of considerable interest to European and Asian investors, with 95% citing its relevance owing to ageing populations, according to the poll, which evaluated how altering demographics in Europe, the US, and Asia are effecting asset allocations.

Technology (84%), energy (67%), agrifood (63%), leisure and tourism (60%), and real estate (59%) were also of current interest to investors, according to a poll of institutional investors and intermediaries.

The rapid advancement of digital and new technologies was highlighted by 95% of investors polled as a significant shift influencing their investing strategy.

The effects of aging populations (91%), shifting consumer purchasing patterns (89%) and population increase in developing economies (86%) came in close succession.

"The findings show the extent to which demographic shifts and asset allocation considerations are interlinked with the ever-quickening pace of technology and the focus on sustainability, which requires a fundamental re-allocation of capital," said Sandro Pierri, CEO of BNP Paribas AM.

The results also imply that changing demographics are giving European investors more assurance.

Nearly 60% of investors in the study saw demographic transition as an opportunity for investment and 20% saw it as a risk, although investors in Asia preferred lower investment risk (39%), which was preferred above higher investment risk anticipated in the US and Europe (both 17%).

Comparatively to 51% of Asian investors, just 21% of European investors cited the expansion of the population in developing markets as a highly significant part of demographic change for investment plans.

"This will need deep transformation in the investment industry to cater for issues such as funding the pension gap, moving from wealth creation to wealth preservation adapted to clients’ risk profiles, or providing for a more digital way of investing. While this presents challenges, it also creates new opportunities," Pierri continued.


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