Julius Baer Group: Healthy living and healthy investments

Julius Baer is the leading Swiss wealth management group and a premium brand in this global sector, with a focus on servicing and advising sophisticated private clients.

 The pandemic has influenced large segments of the population to exercise (photo credit: UNSPLASH)
The pandemic has influenced large segments of the population to exercise
(photo credit: UNSPLASH)

"The pandemic has raised greater awareness of the importance of a healthy lifestyle,” says Dr. Damien Ng, executive director and thematic research analyst at Julius Baer Group AG, the leading Swiss wealth management group. In his work with the firm, Ng focuses on demographics and healthcare issues ranging from genomics and digital health to extended longevity and healthy living. In a recent interview with The Jerusalem Post, he outlined investment opportunities resulting from the pandemic’s physical and mental consequences.

Ng says that while trends toward healthy living were apparent even before the onset of COVID-19, the pandemic has dramatically accelerated this process. The pandemic has prompted many people to adopt healthier habits to keep their immune systems strong while boosting their psychological morale. In a recent Parade/Cleveland Clinic survey, 62% of the respondents said that they had adopted some form of healthy lifestyle changes since the emergence of the global health crisis, with 34% consuming more nutritious foods. Based on these developments, it is clear, says Ng, that the pandemic has ushered in a new era of health awareness in reducing risk factors while augmenting the positive drivers of overall physical and mental health.

Studies have shown that the coronavirus can inflict greater damage on people who are overweight. In fact, Ng states that the majority of COVID-19 cases have occurred in countries with a greater share of overweight citizens. This, in turn, has engendered greater interest among large segments of the population to stay healthy.

The trend in living a healthier lifestyle, says Ng, will be expressed in investment opportunities in nutrition, physical activity, beauty and personal care, healthcare, and mental health. Accordingly, Julius Baer favors companies in the following segments: nutrition – retailers and distributors of fresh fruits and vegetables, as well as manufacturers of organic food and beverages; physical activity – athletic footwear and wearables; beauty and personal care – beauty products; and healthcare – related to cardiovascular, diabetes, and kidney malfunction, as well as musculoskeletal disorders.

Despite the increased consumption of fast foods, Ng says that the long-term prospects of the nutrition segment are promising, given the growing awareness about the importance of good nutrition. Patterns similar to those described in the survey of US consumers toward eating healthy food have been found in China, where 26% of the respondents in a survey said that they were spending more money on fresh food since the health crisis began. The Julius Baer Group suggests that fresh fruits and vegetables, organic foods and beverages and health supplements are all marked for success.

 Damien Ng, Julias Baer executive director and thematic research analyst (credit: Bank Julius Baer) Damien Ng, Julias Baer executive director and thematic research analyst (credit: Bank Julius Baer)

THREE KEY areas, explains Ng, are primed to benefit from the upsurge of interest in physical activity due to the pandemic are athletic footwear, sports apparel and wearable devices. The global athletic footwear industry – which comprises manufacturers and retailers of running shoes, sneakers, trekking shoes, tennis shoes, gym shoes, and cross trainers – is approximately $80 billion.

Sports apparel, linked to the crossover between sports and fashion, interests both men and women. Originally worn only by athletes, sports apparel is today worn by both athletic participants and non-athletes alike. This sports apparel industry is estimated as a $180 billion global business. “Sportswear and athletic shoes are associated with fashion statements and express a kind of identity,” says Ng.

The fitness-tracking devices segment, says Ng, is also poised for increased growth in the coming period. They primarily include activity monitors, smartwatches and smart clothing, which can be used to measure sleep patterns, a variety of sports activities, including running and cycling, the number of daily steps taken, as well as biometric data relating to heart rates, body temperature, heart rhythms and pulse rates. Wearables can provide a data-management capability for those wishing to maintain a healthy lifestyle while keeping their weight under control. 

During the most challenging days of the pandemic, sales of beauty products such as lipstick were substantially lower because people were not leaving their homes or were wearing masks. The beauty market is set for future growth, given society’s emphasis on outward appearances.

According to a 2020 survey conducted in the United Kingdom, says Ng, 85% of those under the age of 18 polled in the country thought that appearance was either very important or important; while 86% of adults felt their mental health had been impacted by the way they feel about their body.

Interestingly, Ng reports that 87% of people surveyed said their pets were a source of great emotional support during the pandemic. This was bolstered by the fact that people were home much of the time and had the time to take care of their pets. In the coming years, China, which has a relatively low percentage of households that own a pet, is considered a potential growth area in the pet business.

IN THE area of mental health, he predicts that therapy sessions via Zoom will continue in certain circumstances. “In some cultures, for example,” says Ng, “there is still a stigma associated with mental illness.” For that reason, some people will prefer to receive treatment from the privacy of their own homes via internet-based therapy.

Ng points out that Julius Baer’s recommendations for investment opportunities in healthcare products stem from the overconsumption of sugar and salt throughout the world. While daily per capita sugar consumption remains relatively low in most countries in East Asia and Africa, he states, it has reached worryingly high levels in South America, Europe, North America, and the Gulf region.

A Harvard School of Public Health study has shown that 180,000 deaths worldwide each year are linked to the overconsumption of sugary drinks. Unsurprisingly, according to the World Health Organization, the United Arab Emirates, Saudi Arabia, Mexico, South Africa and the United States have some of the highest rates of diabetes in the world, which can be caused by excess sugar consumption.

The World Health Organization has also identified excessive salt consumption as another major health risk. Consuming too much salt over a prolonged period can heighten the risk of developing cardiovascular diseases such as hypertension, stroke and heart failure, as well as certain types of stomach cancers.

The world of medicine experienced growth in remote medicine, or telemedicine, during the pandemic. Ng explains that telemedicine is valuable both in remote, underdeveloped areas of the world, where people do not want to travel 500 km. to be treated for a cough and in developed and smaller countries, where health care costs are going up. “Health care costs in countries are rising all over the world,” he says, “and telemedicine can help curb costs.” He cites Singapore, a small, highly developed country, where telemedicine is booming, despite the numerous brick-and-mortar clinics that are found there.

Anecdotally, Ng cites a personal example of the advantages of telemedicine. During the pandemic, Ng, who lives in Zurich, received a call from his parents living in Singapore. His mother had fallen in the bathroom and was unable to get up. He located a doctor online, who contacted his mother on WhatsApp to conduct a preliminary examination. Someone then came to his parents’ home and arranged transportation to a nearby hospital, where his mother convalesced until she returned home several days later. 

Julius Baer is the leading Swiss wealth management group and a premium brand in this global sector, with a focus on servicing and advising sophisticated private clients. It is present in over 25 countries and more than 60 locations, including a Representative Office with an advisory license in Israel. Headquartered in Zurich, the group has offices in other key locations including Dubai, Frankfurt, Geneva, Hong Kong, London, Luxembourg, Mexico City, Milan, Monaco, Montevideo, Moscow, Mumbai, São Paulo, Singapore and Tokyo. More information is available at juliusbaer.com.

This article was written in cooperation with Julius Baer Group AG.