PUBLISHED: 22 AUG 2014 15:50:00 | UPDATED: 23 AUG 2014 02:10:19

FINANCIAL REVIEW KAREN MALEY

Canny investors are taking increasing note of global demographic changes as they try to insulate their portfolios against the effects of a rapidly ageing population in many of the world’s largest economies.

As a Credit Suisse report released this week puts it, “the world is in the midst of a major demographic transition”. Not only is population growth slowing, it says, but the age structure is changing, with the share of the elderly population rising and the young shrinking. “The working-age population is already declining or will soon decline in a number of countries, presenting important challenges regarding future labour supply and potential growth.”

Most advanced economies are already feeling the effect of an ageing population, with the share of the working-age population – defined as people aged between 15 and 64 years – virtually peaking in the developed world. Japan is the most advanced in this process, with its working-age population declining in absolute terms during the past decade.