Pictet AM: An ageing population as an investment opportunity

August 3, 2026

When it comes to an ageing population, most people immediately think of rising healthcare costs, mounting pension liabilities and increasing labour market shortages. However, these challenges conceal a powerful investment opportunity. The very same forces putting pressure on welfare states and labour markets are, at the same time, creating one of the most sustainable and predictable investment themes of the coming decades. Those who use demographics as a compass are riding the wave of a megatrend that is set to continue for decades to come.

The figures behind the demographic shift speak for themselves. Globally, life expectancy has been rising for decades, whilst birth rates are falling sharply. In the 1970s, there were only a few hundred centenarians in the Netherlands. In the spring, Statistics Netherlands (CBS) calculated that by the turn of the year, this figure had risen to over 2,500. According to United Nations projections¹, the number of centenarians worldwide is set to quadruple over the coming decades. Based on the rising historical trend, demographers expect that 3% to 5% of the girls born in the Netherlands this year will eventually reach that magic milestone. Incidentally, the number of births is steadily declining. In 1965, women worldwide still had an average of five children. That figure now stands at around 2.25. The population pyramid in Europe, Japan and North America is rapidly shifting from a classic pyramid to an ‘inverted obelisk’, with relatively fewer young people but far more older people. The very high degree of predictability of this trend makes healthy ageing an attractive investment opportunity.

Not just living longer, but living healthier lives

Although this demographic shift is being felt in all sorts of areas of society, there is another trend from which wider society is benefiting. The quality of those extra years of life is changing fundamentally. Research² by the IMF shows that, in 2022, a 70-year-old had cognitive health scores comparable to those of a 53-year-old in the year 2000. People are also remaining physically fit for longer thanks to better nutrition, medical innovation and a more active lifestyle. The whole notion of what ‘old’ means is changing. People are undeniably living longer. But what pessimists about this demographic shift fail to recognise are precisely the opportunities that this longevity revolution creates. The shift from lifespan to healthspan is not just a social phenomenon, but an economic reality. Older people are no longer solely consumers of care services. They are working for longer, travelling more frequently, spending more and participating in economic and social life for longer. The so-called ‘silver economy’ is growing rapidly and accounts for an increasingly substantial share of total consumer demand in developed economies.

LIFE: measuring impact where it counts To systematically explore this broad investment universe, experts within our organisation developed their own analytical methodology: the Longevity Impact Factor Evaluation, or LIFE for short. This framework was developed in collaboration with Unisanté, the University of Lausanne’s medical school. It differs from traditional investment analysis in that it looks not only at companies’ financial performance – such as revenue and profit growth – but also at the extent to which their products and services demonstrably contribute to health, quality of life and social productivity. Each investment is thus assessed in terms of its contribution to one of the two pillars of our strategy: extending healthy life years, or increasing productivity in a tighter labour market. For example, a manufacturer of diagnostic equipment scores highly on extending healthy life years, whilst a provider of AI software for workforce planning scores highly on productivity. Companies that contribute to both pillars are given greater weighting in our portfolio. This dual assessment – financial and social – also aligns with the growing demand from the investment world for a demonstrable link between returns and relevance.

 
The instinct of many investors is to automatically link longer life and healthier ageing – also described as ‘longevity’ – to pharmaceuticals, biotech or medical devices. Naturally, these sectors benefit from an ageing population. Demand for diagnostics, preventive care, robotic surgery and innovative therapies will continue to rise. However, this represents only part of the picture.

In our investment strategy, we focus on two complementary pillars: healthspan and productivity. The ‘healthspan’ pillar encompasses efficient and proven healthcare solutions that improve quality of life and extend healthy years. Examples include pharmaceutical innovation, preventive diagnostics and digital health monitoring. The ‘productivity’ pillar focuses on technologies that boost the efficiency of employees and businesses, such as AI applications, industrial robotics and cloud software. A boost in productivity is urgently needed given the prospect of a shrinking global workforce. The portfolio comprises pharmaceutical companies, as well as software firms that automate business processes, manufacturers of industrial robots and companies developing smart-home technology for older people.
 

Older people are no longer merely recipients of care. They are working for longer, travelling more often, spending more and remaining active in economic and social life for longer.

 
It is precisely the link between an ageing population and productivity that makes longevity a particularly robust investment theme. In many developed economies, the working-age population is shrinking faster than companies can attract new talent. This heightens the need to boost productivity through automation, artificial intelligence and digital infrastructure. Moreover, demand for productivity-enhancing technology is relatively independent of the economic cycle. Whether economic growth is temporarily slowing or picking up, structural labour shortages must be addressed. This gives ‘longevity’ as an investment theme a relatively defensive character: a characteristic that is particularly valuable for pension funds and insurers with long investment horizons.

Healthcare costs as a driver of investment opportunities

An ageing population has a direct and measurable impact on healthcare expenditure in the Western world. According to the OECD³, public healthcare costs in most developed economies are rising at a faster rate than gross domestic product on a structural basis. In the Netherlands, healthcare expenditure already exceeded €130 billion in 2023, representing over 15 per cent of GDP: one of the highest percentages in the world. In the United States, such expenditure even exceeds 17 per cent of GDP. For investors, the pressure on healthcare budgets is not a cause for concern, but rather a call to action. Governments and healthcare systems grappling with rising costs are seeking solutions to make healthcare more efficient, cheaper and more accessible. This plays into the hands of providers of, amongst other things, preventive healthcare, digital health platforms, home monitoring and data-driven treatments. These sectors remain relatively undervalued relative to their growth potential. For investors, therefore, longevity is much more than just a healthcare theme. It is a broad economic transformation affecting sectors ranging from technology and property to consumer goods and automation. Those who use demographics as their compass are riding the wave of one of the most powerful and predictable megatrends of this century. This gives you a head start on the stock market.
 

IN SHORT An ageing population creates one of the most predictable investment themes: rising demand for care, automation and productivity-enhancing technology. Older people are not only living longer, but are also becoming more active: a 70-year-old today has the same cognitive profile as a 53-year-old in 2000. Due to increasing pressure on healthcare budgets, governments and healthcare systems are increasingly focusing on solutions that safeguard the quality and accessibility of care at lower costs.

^{1 Source: IPS News / United Nations Population Division, May 2026
2 Source: IMF World Economic Outlook, Chapter 2: ‘The Rise of the Silver Economy’, April 2025
3 Source: OECD Health Statistics / RIVM Public Health Future Outlook}

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