Betting on an Aging Population: ETFs Invest in Staying in Place in the U.S.

Exchange-traded funds (ETFs) are becoming increasingly popular with older Americans. ETFs offer many of the same benefits as traditional mutual funds, but with greater flexibility and transparency. For investors looking to tap into the growing market of older Americans, ETFs are an attractive option.

The pandemic, new technologies and changing life expectancy in the U.S. are having an impact on how older Americans view aging. Over-50 adults want to age in their homes for as long as they can, and there are new technologies and services emerging—known as “age tech”—that are designed to help them do so. Age tech includes products and services like medical alert systems, home care robots and virtual reality therapies. These technologies can help older adults stay independent and connected to their communities.

There is a group of ETFs focused on the aging theme, which is not surprising given the aging population. These ETFs offer exposure to companies that are expected to benefit from the aging population, such as healthcare and senior housing companies.

Hartford Funds has recently launched the Hartford Longevity Economy ETF (HLGE). This ETF tracks the Hartford Longevity Economy Index, which is made up of companies that support aging in place, home modification, working longer, performance health, social connections, financial freedom, mobility, human enhancement and entertainment. The fund has an expense ratio of 0.44%.

The index includes a variety of themes, so the holdings are a bit of a combo platter. They include pharmaceutical companies such as Merck & Co. and Pfizer Inc. PFE 2.24%.

Hewlett Packard Enterprise Co. is not only a leading technology company, but also a major player in the business world. HPE 3.25% is a company that is constantly innovating and expanding its reach. From desktop computing and servers to cloud services and data storage, HPE has a lot to offer businesses of all sizes.

World Wrestling Entertainment Inc. (WWE) is one of many entertainment companies that have been hit hard by the pandemic. WWE's stock has fallen 21.13% since the start of the year.

Global X also has a fund focused on longevity. The Global X Aging Population ETF (AGNG) invests in the services side of aging with positions in healthcare companies, pharmaceuticals, senior-living facilities and age-tech companies. The fund has an expense ratio of 0.50%.

The largest holdings in AGNG are more focused on health than HLGE. These include companies such as biotech firm Amgen Inc.

In addition to pharmaceutical companies such as Regeneron Pharmaceuticals Inc., there are also other companies that are working on developing treatments for COVID-19.

AstraZeneca PLC is a pharmaceutical company that manufactures and markets prescription drugs. The company is headquartered in the United Kingdom and has operations in over 100 countries. AstraZeneca is a publicly traded company and its shares are listed on the London Stock Exchange.

The fund also offers exposure to health-tech companies such as Boston Scientific Corp. and Medtronic PLC.

BlackRock is one of the world's largest asset managers, with over $7 trillion in assets under management. The company offers a wide range of investment products and services, including mutual funds, exchange-traded funds, and retirement and financial planning services. BlackRock is headquartered in New York City and has offices in more than 30 countries around the world.

The iShares Ageing Population Ucits ETF (AGED) provides exposure to companies focused on the global aging population. The fund invests in developed and emerging-markets companies, and has an expense ratio of 0.40%.

This fund includes exposure to different sectors like healthcare, financials, consumer discretionary, consumer staples, real estate and industrials. The healthcare and financials sector have the biggest weighting. The healthcare investments in this fund tend to be more futuristic, with positions in companies like biotech company Sarepta Therapeutics Inc.

Investments in genetic medicine tend to favor firms with large wealth-management divisions, such as Charles Schwab Corp.

Investors seeking a lower-cost ETF might look at Vanguard Health Care (VHT). VHT tracks the MSCI US IMI Health Care 25/50 index, which is a large all-cap index of healthcare companies. This gives investors exposure to all the healthcare companies in the thematic funds, but in a less concentrated way and without exposure to other sectors. The expense ratio for VHT is much lower at 0.10%.