February 2019
Global Obesity
14/02/19 17:20
Efforts to Tackle Global Obesity Shaping a New Investment Megatrend, Says New BofA Merrill Lynch Report
Analysis Pinpoints Sectors and Companies Developing Obesity Solutions
NEW YORK and LONDON – Increasing efforts to tackle obesity over the coming decades will form an important new investment theme for fund managers, according to a new BofA Merrill Lynch Global Research report called “Globesity - The Global Fight Against Obesity.”
“Global obesity is a mega-investment theme for the next 25 years and beyond. Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world,” said Sarbjit Nahal, equity strategist at BofA Merrill Lynch Global Research.
BofA Merrill Lynch has identified a Global Fighting Obesity Exposure Stocklist-50+ centering on four areas: Pharmaceuticals and Healthcare; Food; Commercial Weight Loss, Diet Management and Nutrition; and Sports Apparel and Equipment.
The report by the BofA Merrill Lynch ESG (Environment, Social, and Governance) and Sustainability team identifies that efforts to reduce obesity is a “megatrend” with a shelf-life of 25 to 50 years. It charts the rise of obesity globally and the ballooning costs. BofA Merrill Lynch analysts across several sectors have collaborated to identify the sectors and companies developing long-term solutions. Earlier this year, the firm’s biotech team highlighted in “The Skinny on Obesity” the growing potential for development of new drugs to combat weight gain. “The FDA has historically had little risk tolerance for weight loss drugs, but recently has shown increased support for their development,” said Steve Byrne, biotechnology analyst at BofA Merrill Lynch Global Research.
Globally, 500 million people are obese and 1.4 billion are overweight. Obesity is the fifth greatest cause of death, leading to 2.8 million fatalities each year. Worldwide prevalence of obesity doubled between 1980 and 2008, according to the World Health Organization. By 2030, 65 million more Americans will be obese if current trends continue. While its impact is well-known in the West, obesity is rising quickly around the world. Obesity in Europe has tripled in 30 years. It is growing rapidly in emerging markets as diets westernize. Brazil, where 16 percent of the population is obese, is on track to match U.S. obesity levels by the 2020s. Obesity has reached levels of up to 20 percent in Chinese cities. A quarter of Russian women are obese.
Growing costs and tighter regulations spur fight against obesity
The costs of managing obesity are much greater than previously believed. In May 2012, the U.S. Institute of Medicine estimated the annual cost of obesity-related illness in the U.S. alone is more than $190 billion – equal to 21 percent of annual medical spending. Previous studies estimated 10 percent.
Medical costs for treating obese patients are 40 percent higher than for non-obese patients. Treating obese patients comes at a higher premium than treating smokers. Obesity adds 50 percent to annual medical costs, while smoking adds 20 percent. High levels of global childhood obesity and growing obesity in emerging markets will further increase global costs.
As happened with smoking, it is likely that the growing cost burden of obesity on governments, corporates and wider society will spur collective action and greater regulation. BofA Merrill Lynch expects widespread scrutiny of lifestyle aspects associated with obesity including food and drink, schools, work environments, insurers, tackling sedentary lifestyles, and encouraging increasing physical activity.
Investment ideas for fighting globesity
Investors should take a long term view and a broad perspective in selecting stocks as part of the globesity theme, in our view. BofA Merrill Lynch Global Research has identified more than 50 global stocks across four key entry points:
Pharmaceuticals and Health Care – We look at companies taking advantage of the FDA’s increased support for obesity drug development. We also highlight companies tackling related medical conditions and needs including diabetes, kidney failure, hip and knee implants. We also consider equipment such as patient lifts, bigger beds and wider ambulance doors.
Food – We position companies on their efforts to access the $663 billion “health and wellness” market, as well as on how they are reformulating their portfolios to respond to increasing pressure such as “fat taxes” to reduce sugar and fat levels.
Commercial Weight Loss, Diet Management and Nutrition – Up to 50 percent of some western populations pursue dieting, targeted nutrition and behavioral change making it a $4 billion market in the U.S. and growing globally.
Sports Apparel and Equipment – This is the longer-term play, but we believe that promoting physical activity will become a key priority for more government health policies.
Analysis Pinpoints Sectors and Companies Developing Obesity Solutions
NEW YORK and LONDON – Increasing efforts to tackle obesity over the coming decades will form an important new investment theme for fund managers, according to a new BofA Merrill Lynch Global Research report called “Globesity - The Global Fight Against Obesity.”
“Global obesity is a mega-investment theme for the next 25 years and beyond. Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world,” said Sarbjit Nahal, equity strategist at BofA Merrill Lynch Global Research.
BofA Merrill Lynch has identified a Global Fighting Obesity Exposure Stocklist-50+ centering on four areas: Pharmaceuticals and Healthcare; Food; Commercial Weight Loss, Diet Management and Nutrition; and Sports Apparel and Equipment.
The report by the BofA Merrill Lynch ESG (Environment, Social, and Governance) and Sustainability team identifies that efforts to reduce obesity is a “megatrend” with a shelf-life of 25 to 50 years. It charts the rise of obesity globally and the ballooning costs. BofA Merrill Lynch analysts across several sectors have collaborated to identify the sectors and companies developing long-term solutions. Earlier this year, the firm’s biotech team highlighted in “The Skinny on Obesity” the growing potential for development of new drugs to combat weight gain. “The FDA has historically had little risk tolerance for weight loss drugs, but recently has shown increased support for their development,” said Steve Byrne, biotechnology analyst at BofA Merrill Lynch Global Research.
Globally, 500 million people are obese and 1.4 billion are overweight. Obesity is the fifth greatest cause of death, leading to 2.8 million fatalities each year. Worldwide prevalence of obesity doubled between 1980 and 2008, according to the World Health Organization. By 2030, 65 million more Americans will be obese if current trends continue. While its impact is well-known in the West, obesity is rising quickly around the world. Obesity in Europe has tripled in 30 years. It is growing rapidly in emerging markets as diets westernize. Brazil, where 16 percent of the population is obese, is on track to match U.S. obesity levels by the 2020s. Obesity has reached levels of up to 20 percent in Chinese cities. A quarter of Russian women are obese.
Growing costs and tighter regulations spur fight against obesity
The costs of managing obesity are much greater than previously believed. In May 2012, the U.S. Institute of Medicine estimated the annual cost of obesity-related illness in the U.S. alone is more than $190 billion – equal to 21 percent of annual medical spending. Previous studies estimated 10 percent.
Medical costs for treating obese patients are 40 percent higher than for non-obese patients. Treating obese patients comes at a higher premium than treating smokers. Obesity adds 50 percent to annual medical costs, while smoking adds 20 percent. High levels of global childhood obesity and growing obesity in emerging markets will further increase global costs.
As happened with smoking, it is likely that the growing cost burden of obesity on governments, corporates and wider society will spur collective action and greater regulation. BofA Merrill Lynch expects widespread scrutiny of lifestyle aspects associated with obesity including food and drink, schools, work environments, insurers, tackling sedentary lifestyles, and encouraging increasing physical activity.
Investment ideas for fighting globesity
Investors should take a long term view and a broad perspective in selecting stocks as part of the globesity theme, in our view. BofA Merrill Lynch Global Research has identified more than 50 global stocks across four key entry points:
Pharmaceuticals and Health Care – We look at companies taking advantage of the FDA’s increased support for obesity drug development. We also highlight companies tackling related medical conditions and needs including diabetes, kidney failure, hip and knee implants. We also consider equipment such as patient lifts, bigger beds and wider ambulance doors.
Food – We position companies on their efforts to access the $663 billion “health and wellness” market, as well as on how they are reformulating their portfolios to respond to increasing pressure such as “fat taxes” to reduce sugar and fat levels.
Commercial Weight Loss, Diet Management and Nutrition – Up to 50 percent of some western populations pursue dieting, targeted nutrition and behavioral change making it a $4 billion market in the U.S. and growing globally.
Sports Apparel and Equipment – This is the longer-term play, but we believe that promoting physical activity will become a key priority for more government health policies.
Obesity 'bad for brain'
14/02/19 17:18
Obesity 'bad for brain' by hastening cognitive decline – ( Source: BBC 8/21/12)
Being overweight is not just bad for waistlines but for brains too, say researchers who have linked obesity to declining mental performance. Experts are not sure why this might be, but say metabolic changes such as high blood sugar and raised cholesterol are likely to be involved. Obesity has already been tipped as a risk factor for dementia.
The work, published in Neurology, tracked the health of more than 6,000 British people over a decade.The participants, who were aged between 35 and 55, took tests on memory and other cognitive skills three times over a 10-year period.People who were both obese and who had unhealthy metabolic changes showed a much faster decline on their cognitive test scores compared to others in the study.
Delving deeper
The experts stress that they only looked at cognitive function, not dementia.The boundary between normal ageing, mild cognitive impairment and dementia is blurred - not all impairment leads to dementia.All of the study participants came from one group of civil service workers, which may mean the findings may not apply more generally to other populations. They said: "More research is needed to look at the effects of genetic factors and also to take into account how long people have been obese and how long they have had these metabolic risk factors and also to look at cognitive test scores spanning adulthood to give us a better understanding of the link between obesity and cognitive function, such as thinking, reasoning and memory."Shirley Cramer of the Alzheimer's Research UK said: "We do not yet know why obesity and metabolic abnormality are linked to poorer brain performance, but with obesity levels on the rise, it will be important to delve a little deeper into this association. "While the study itself focuses on cognitive decline, previous research suggests that a healthy diet, regular exercise, not smoking and controlling blood pressure and cholesterol in midlife can also help stave off dementia. With dementia figures spiralling towards a million, the findings suggest we should be conscious of our general health throughout life."
Being overweight is not just bad for waistlines but for brains too, say researchers who have linked obesity to declining mental performance. Experts are not sure why this might be, but say metabolic changes such as high blood sugar and raised cholesterol are likely to be involved. Obesity has already been tipped as a risk factor for dementia.
The work, published in Neurology, tracked the health of more than 6,000 British people over a decade.The participants, who were aged between 35 and 55, took tests on memory and other cognitive skills three times over a 10-year period.People who were both obese and who had unhealthy metabolic changes showed a much faster decline on their cognitive test scores compared to others in the study.
Delving deeper
The experts stress that they only looked at cognitive function, not dementia.The boundary between normal ageing, mild cognitive impairment and dementia is blurred - not all impairment leads to dementia.All of the study participants came from one group of civil service workers, which may mean the findings may not apply more generally to other populations. They said: "More research is needed to look at the effects of genetic factors and also to take into account how long people have been obese and how long they have had these metabolic risk factors and also to look at cognitive test scores spanning adulthood to give us a better understanding of the link between obesity and cognitive function, such as thinking, reasoning and memory."Shirley Cramer of the Alzheimer's Research UK said: "We do not yet know why obesity and metabolic abnormality are linked to poorer brain performance, but with obesity levels on the rise, it will be important to delve a little deeper into this association. "While the study itself focuses on cognitive decline, previous research suggests that a healthy diet, regular exercise, not smoking and controlling blood pressure and cholesterol in midlife can also help stave off dementia. With dementia figures spiralling towards a million, the findings suggest we should be conscious of our general health throughout life."
Growing Global Middle Class
14/02/19 17:14
Growing Global Middle Class
The middle-class center of gravity appears to be heading eastward.
In 2009, the global middle class consumed $21 trillion in aggregate, with North America accounting for roughly a quarter of that total. By 2030, global middle class spending is expected to exceed $55 trillion - and North America will likely only account for about 10% of it.
Asia Pacific region is expected to grow of 500%. While increasing Chinese spending tops the news, the East Asia Bureau of Economic Research forecasts that spending in India and Indonesia will grow at similar rates.
Source: Charles Schwab Onlnvesting, Fall 2012 and SOURCE: Homi Kharas, “The Emerging Middle Class in Developing Countries,” Organisation for Economic Co-operation and Development, January 2010.
“Middle class” is defined as those households with daily expenditures between
$10–100 USD per person in purchasing power parity terms.
The middle-class center of gravity appears to be heading eastward.
In 2009, the global middle class consumed $21 trillion in aggregate, with North America accounting for roughly a quarter of that total. By 2030, global middle class spending is expected to exceed $55 trillion - and North America will likely only account for about 10% of it.
Asia Pacific region is expected to grow of 500%. While increasing Chinese spending tops the news, the East Asia Bureau of Economic Research forecasts that spending in India and Indonesia will grow at similar rates.
Source: Charles Schwab Onlnvesting, Fall 2012 and SOURCE: Homi Kharas, “The Emerging Middle Class in Developing Countries,” Organisation for Economic Co-operation and Development, January 2010.
“Middle class” is defined as those households with daily expenditures between
$10–100 USD per person in purchasing power parity terms.