Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

10401

Efforts to tackle global obesity shaping a new investment mega-trend

RELATED TOPICS​

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,” says Sarbjit Nahal, equity strategist at BofA Merrill Lynch Global Research.
 
BofA Merrill Lynch has identified a Global Fighting Obesity Exposure Stocklist-50+ centring 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 “mega-trend” 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,” says 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 per cent of the population is obese, is on track to match US obesity levels by the 2020s. Obesity has reached levels of up to 20 per cent in Chinese cities. A quarter of Russian women are obese.
 
The costs of managing obesity are much greater than previously believed. In May 2012, the US Institute of Medicine estimated the annual cost of obesity-related illness in the US alone is more than USD190bn – equal to 21 per cent of annual medical spending. Previous studies estimated 10 per cent.
 
Medical costs for treating obese patients are 40 per cent higher than for non-obese patients. Treating obese patients comes at a higher premium than treating smokers. Obesity adds 50 per cent to annual medical costs, while smoking adds 20 per cent. High levels of global childhood obesity and growing obesity in emerging markets will further increase global costs.

Latest News

The trading and investment platform eToro has extended its proxy voting feature to all stocks..
C8 Technologies, the London-based fintech founded by former BlueCrest Capital Management partners Mattias Eriksson and..
DWS has announced the latest development in its strategic growth push in Alternative Credit with..

Related Articles

The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a possible buyout of EY’s Italian consulting branch...
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a..
Pension funds
UK defined benefit (DB) pension plan sponsors could have access to GBP 1.2 trillion in surplus assets over the next decade, industry research reveals...
UK defined benefit (DB) pension plan sponsors could have access to GBP 1.2 trillion in surplus assets over the next..
Tim Crawmer, Payden & Rygel
Tim Crawmer and Frasat Shah of Payden & Rygel write that higher yields are attracting more demand from investors. Also, given that equities had a strong year last year, big funds have taken some chips off the table in equities and put them into fixed income...
Tim Crawmer and Frasat Shah of Payden & Rygel write that higher yields are attracting more demand from investors. Also,..
Lady justice
Top marks for the Pensions Regulator (TPR) whose efforts to improve resilience in the UK pension funds’ liability-driven investment (LDI) strategies received glowing commendations from the Bank of England in its March report...
Top marks for the Pensions Regulator (TPR) whose efforts to improve resilience in the UK pension funds’ liability-driven investment (LDI)..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by