<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN: I\u2019m chatting now with Sean Kelly from Parity Wealth Managers. Sean, appreciate the early morning time. We are chatting health, chatting biotech.<\/p>\n
Demographic and social shifts are creating long-term investment opportunities in healthcare and in biotech. This is the big structural theme underlying the story.<\/p>\n
SEAN KELLY: Morning, Simon, and always great to be on. You are spot on. I think healthcare is one of the clearest long-term structural themes we all see, and it\u2019s simply because people are living longer. Populations are ageing, and the demand for healthcare is becoming more complex.<\/p>\n
According to the UN, by 2050 one in six people globally will be aged 65 or older, compared to just one in 11 in 2019. And in many developed economies that demographic shift is already well underway. We see this, for example, in Japan, where already nearly 30% of its population is aged over 65, while Italy is sitting around 24%.<\/p>\n
Read:
2026 ready: Stop guessing, start protecting \u2013 your smart medical aid strategy
Japan\u2019s births fall for 10th year adding to demographic strain
SA\u2019s ageing population comes with new challenges<\/p>\n
On the other side of the same coin, fertility rates are declining sharply across much of the world. Global fertility rates have fallen from around five children in the 1950s to around 2.3 today. In some countries, it\u2019s even more extreme. South Korea\u2019s fertility rate, for example, is around 0.8 children per woman, and that\u2019s well below the 2.1 required to maintain long-term population stability.<\/p>\n
These demographic trends have enormous economic implications. As populations age, healthcare spending rises, demand for chronic disease management increases, and governments are now facing growing pressure on healthcare and pension systems.<\/p>\n
I think the definition of healthcare is changing dramatically and broadening, from simply extending life span to improving health span.<\/p>\n
So from an investment perspective, this creates powerful long-term opportunities across healthcare, biotech diagnostics and prevention care.<\/p>\n
We\u2019ve seen this particularly in areas like obesity treatment, where innovation is now accelerating.<\/p>\n
SIMON BROWN: Absolutely. As you said, healthcare is about wellness in a sense, and the weight-loss drugs fit perfectly into it. And biotech innovation \u2013 we\u2019ve seen it dominating headlines. This is a genuine long-term investment trend. Sure, there\u2019s always some market hype floating around, but this is a real long-term investment trend that investors can latch onto.<\/p>\n
SEAN KELLY: Yes, absolutely, Simon. The obesity\u00a0data alone is significant. The World Health Organisation estimates that around 2.5\u00a0billion adults globally are overweight, and more than 890\u00a0million adults are living with obesity. That\u2019s roughly 43% of all adults that they reckon are overweight.<\/p>\n
That\u2019s why these GLP-1 drugs, initially developed for diabetes treatments, have attracted so much attention and public awareness. We\u2019ve seen them, of course, recently increase very quickly; at one point it almost became harder to find a celebrity not talking about them.<\/p>\n
Read:
Weight-loss drugs drive new spending shift in SA
McDonald\u2019s shares slip as GLP-1 risks spur rare sell rating
The appetite for GLP-1 drugs grows
Obesity drugs market could grow to $100bn by 2030<\/p>\n
But I don\u2019t think it\u2019s a cosmetic or celebrity-driven story. If these treatments continue to prove effective, they could meaningfully change how we think about disease, healthcare spending, and even long-term health outcomes.<\/p>\n
And from a market perspective, the numbers are already meaningful. Global spending on anti-obesity medicine exceeded $30 billion in 2024, which is 10 times higher than in 2020, and that number is projected to grow by a further 200%.<\/p>\n
So while markets may overestimate the short-term impact of innovation, they often underestimate the long-term structural change.<\/p>\n
SIMON BROWN: Yes, it is obstruction. And that brings me to my last question. The sort of portfolio question. How do investors think around exposure here and healthcare biotech within a portfolio? Is it individual counters? Are there collective investment schemes, ETFs? How are you advising your clients in this space?<\/p>\n
SEAN KELLY: Yes, it\u2019s an excellent question and I think what we are sort of advising our clients is that healthcare is not a single theme. It\u2019s really a collection of different innovations and defensive opportunities. We\u2019ve seen this historically in ETFs that focused purely on healthcare. It has averaged around 9% over the past decade.<\/p>\n
Read:
Which healthcare stock does your portfolio need?
Aspen Pharmacare eyes Canada GLP-1 generic approval by September<\/p>\n
Biotech, on the other hand, has been far more volatile. In biotech the share prices can sometimes move faster than the actual science. And if you look at a biotech ETF like the SPDR, it\u2019s up more than 7% in the past 12 months.<\/p>\n
So for investors, the starting point should not necessarily be to try to identify the next breakthrough biotech company; they should rather diversify their healthcare exposure across the healthcare ecosystem.<\/p>\n
And I think the biggest mistake investors can make is dismissing healthcare as just a defensive sector. Increasingly, it may become one of the most important long-term innovation stories of the next decade.<\/p>\n
SIMON BROWN: I get your point. And I think it is very, very much around the innovation. That is a huge part of it. And living longer, living healthier, nothing wrong with that. We all benefit from it.<\/p>\n
We\u2019ll leave it there. Sean Kelly from Parity Wealth, appreciate the early morning.<\/p>\n
#Exploring #structural #healthcare #biotech<\/p>\n","protected":false},"excerpt":{"rendered":"
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