A few days ago a landmark study was published in The Lancet (a renowned medical journal). The results were alarming.

The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs. 

 

As any doctor will advise, a high BMI places a person at greater risk of heart and kidney diseases, diabetes, certain types of cancers and other potentially preventable illnesses. The obesity trend has immense personal and economic implications for many people, companies and governments around the world.

Globally, there will undoubtedly be a strengthening of efforts by many organisations to help reduce the obesity trend. With this in mind, a number of large listed companies are already contributing to this important effort by promoting healthier lifestyles through their products and services. As global awareness continues to build on the benefits of a healthy lifestyle, we believe investing in these companies will also lead to strong financial returns. We call this healthy investing.

Healthy Investing – What to Buy?

Fitness activity trackers

Companies such as Fitbit, Garmin and Apple produce wearable devices (e.g. watches and bands) that are able to help track a user’s fitness and encourage greater physical activity. In 2015, 78 million wearable devices were sold, an increase of nearly 50 million compared to 2014 (source: IDC). Further significant growth is projected, with IDC expecting the worldwide wearables market to grow to around 205.1 million units by 2019 (source: statista)

What was a niche industry is rapidly becoming mainstream particularly as large corporations start giving employees fitness activity trackers as part of their corporate wellness programmes.

Preferred investment pick: Fitbit, which is the undisputed leader in the industry with a 27% market share in 2015.

 

Infographic: Fitbit Retains Wearables Market Lead | Statista

You will find more statistics at Statista

 

Sports brands

Famous sports brand companies like Nike and Adidas are well known for promoting an active lifestyle among consumers. After all, there is probably no better fitness phrase than Nike’s iconic “JUST DO IT”.

Through the worldwide reach of their products and marketing, sporting brand companies will play an important role in encouraging a healthier global population.

Preferred investment pick: Nike, a US$100 billion company with global reach and significant financial growth potential ahead. Click here for an infographic of Nike’s journey to building one of the world’s most successful brands and performance over the last decade.

For full disclosure, as at the date of publication, both Fitbit and Nike are investments within the AtlasTrend Healthy Lifestyle managed fund

Healthy Investing – What to Avoid?

Here are some companies and industries that in some ways have contributed to the obesity trend. If you are a believer in supporting companies that help address the global obesity crisis, then you may want to consider avoiding investing in the following:

Soda (soft) drinks

According to industry publication Beverage Digest, average soda consumption in the US was approximately 154 litres per person during 2015. It is well documented that that sugar within these drinks are a substantial contributor to obesity in the US and many other countries.

As a result, the United Kingdom government recently unveiled a tax on sugary drinks. India, the Philippines and Indonesia are also considering a similar tax. None of this will mean large listed soft drink companies such as Coke or Pepsi will go out of business. However, it does show they will face increasing difficulties ahead as governments around the world gain momentum in their fight against obesity.

Fast food

A recent study by the US Centers for Disease Control and Prevention showed US children and adolescents obtain 12.4% of their daily calorie intake from fast food. That is equivalent to a eating a small hamburger every single day. Fast food is not solely to blame but US childhood and adolescent obesity rates have doubled and quadrupled over the last 30 years. In China, after one generation of urbanisation, 20% of children are overweight or obese (versus 5% in the early 1980s).

Unsurprisingly, fast food companies like Yum Brands (who owns KFC and Pizza Hut) and McDonalds have enjoyed relatively strong financial performance in recent years. However, in response to the growing awareness of the importance of a healthier lifestyle, fast food chains like McDonalds have started introducing healthier meal options. Looking ahead fast food companies may face more headwinds particularly if trend towards healthier lifestyles gains even greater pace.

 

For profiles of other listed international companies in AtlasTrend’s Healthy Lifestyle managed fund, sign up for free.

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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kent has over 15 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.