We as a nation are living longer – introducing a host of investment opportunities according to Johan Utterman, portfolio manager of Lombard Odier Golden Age fund.
He said that those in the senior years of their lives are opting to lead a more glamorous and healthier lifestyle – opting to jump on to a retro Harley-Davidson motorbike or take up golf.
The image of a vulnerable pensioner struggling to pay their energy bills is one that is often depicted in the media and does not truly reflect the full picture.
He said there are nearly two million people over 60 with £1m in total wealth, including their property in the UK alone.
“We are not undermining the fact that not everyone is well off. Some have to prolong their retirement. But what we are seeing is that, on a relative basis, they are doing quite well for themselves.
Mr Utterman was appointed to manage the fund in March 2012. He claims its performance level has since shot up by 57 per cent – up 10.6 per cent on the MSCI benchmark.
Launched in 2009, the fund invests in equities globally that are seen to benefit the ageing population in the long term ageing population trend across multiple sectors.
A large portion of the fund – 44.93 per cent according to Morningstar – is invested in the healthcare sector.
The consumer and financial services sectors amount to 20.41 per cent and 18.53 per cent of the fund respectively, while 5.35 per cent is spent on the industrials sector – according to the investment research and management firm.
A mere 4.48 per cent of the fund is currently being invested in technology, although this will soon change as the population becomes increasingly tech savvy, according to Mr Utterman.
One company the fund manager has taken a particular interest in is Tarkett, which produces an innovative sensor, embedded in the floor, which tracks an individual’s movement or falls. It is connected to an alarm system and features a monitoring service for healthcare providers, accessible by a computer, tablet or a smartphone.
He also keeps a keen eye on Google X – a secretive branch of the internet juggernaut which is dedicated to making major technological advancements.
“Technology will be more and more important going forward. We spend a lot of time watching what Google is doing and ensure that we stay up to date on what is going on.”
The Office of National Statistics calculates that in the UK, a household’s net worth peaks when the head of household is between 55 and 64.
In Japan, one in four people is aged 65 years or older and those aged over 60 contribute to more than 40 per cent of consumer spending, Mr Utterman said.
There is money to be made by directing goods and services to this age group, Mr Utterman continued, adding: “Companies have not marketed that well to those people but they are getting better.
“Amazon, for example, has a dedicated website called Amazon 50+, which offers product relevant to this group.”
Managing a fund with assets in the value of €380m (£291m) is not without its surprises.
The Swiss National Bank abandoning its peg to the euro is one such surprise which had a negative impact on the fund’s healthcare investment in Switzerland, Mr Utterman said.
He added that fluctuations in the price of oil, the stalemate over the Greek bailout and the scale of the ECB’s quantitative easing programme may add volatility to the global equity market.
Chancellor George Osborne introduced a slew ofradical changes to pensions in his 2014 Budget – not least the ability for those over 55 to delve into their pension pots as and when they see fit.
This bodes well for one of the fund’s investments, St James’s Place, Mr Utterman said, adding that the wealth management company would be able to retain more clients for longer as a result of the change.
What does he enjoy most about his role?
“A lot of investors can relate to what goes into the portfolio and see where the demand is coming from. I enjoy being able to anchor to build a conviction that this [the product] is not going to be a fad but is here to stay.”
Myron Jobson is a feature writer of Financial Adviser
Bio
2012-present
Lombard Odier, portfolio manager of Golden Age fund
2008-2012
Lombard Odier senior healthcare analyst of 1798 Fundamental Strategies Fund
2007 – 2008
HBK Capital Management, senior medical technology & device analyst
2005 – 2007
Hunter Global Investors, healthcare analyst
2002 – 2005
Fidelity Investments, analyst
1998 – 2002
Morgan Stanley, vice-president, healthcare investment banking
1995 – 1998
Salomon Brothers, associate, mergers & acquisitions
