The Analyst: Keeping ahead of a changing world

At first you may think I have taken leave of my senses reviewing a fund that has the word "consumer" in its name. Given that global growth is slowing (with UK, European and American growth on its knees) and consumer credit is at its limit, the idea of investing in this area might seem complete madness. However, as I often say to investors, you must look under the bonnet of a fund rather than assuming all the clues are in the title.

The JPM Global Consumer Trends Fund looks to find long-term themes that are durable rather than short-term spending fads. These consumer trends are not constant – they keep changing – but globally they are worth $30trillion (£15trillion).

One of the essential areas of the shifting consumer landscape is the emerging markets story; as more people ascend to the middle classes in these economies there is an increase in consumption growth. This is illustrated using the example of beer and packaged foods; in the US, where per annual capita income is $43,000, consumers spend $132 on beer and $1,055 on packaged foods. In Russia, by contrast, they spend only $74 on beer and $340 on packaged foods. Looking east to India, they spend a mere $1 on beer and just $9 on packaged food. Placed in the context that their per capita incomes are $4,460 and $720 respectively, it is evident that there is a long way to go.

Consumer trends can simplistically be broken down to three parts; demographics, health and wellness and aspiration. Looking first at demographics we see the re-emergence of a regular theme in my column: urbanisation. Today, 49 per cent of the world's population lives in towns and cities and by 2030 this is forecast to grow to 60 per cent. In addition, the global urban population will grow from 3 billion in 2003 to 5 billion by 2030. These changing demographics will affect the way wages grow and living standards change, providing fantastic opportunities for the likes of convenience stores, branded products, healthcare providers and retailers.

In the developed world, demographics are changing as a result of the baby boomers approaching retirement. Not only are they expected to outlive their forefathers by 19 years, but they also have adopted a much more youthful outlook with associated spending habits. Financial services, health care, leisure and travel are all industries set to benefit from this shift.

Tied up with living longer is the pre-occupation with living healthier, providing incredible growth opportunities for areas such as organic food sales. In 1997, US organic food sales were worth $3.9bn; now that figure is closer to $18bn.

A company leading the way in our quest for healthier lifestyles is Herbalife, one of the world's largest network marketing companies, supplying us with anti-ageing creams, weight management products and dietary supplements.

In respect of healthier living two-thirds of the global population suffer from dietary deficiencies, this opens up a market to offer health and hygiene solutions to the emerging markets that currently spend just a fraction of what we spend in the West. Hong Kong-based Hengan are poised to take advantage of this rising trend. The ever-expanding middle class being produced by urbanisation is leading the way in aspirational consumption, with a huge appetite for branded products. In Asia in particular, these branded goods are seen as a mark of success, though few of these high-demand brand products belong to Asia, leaving Europe to benefit. Of the top 100 global brands, 53 are North American, 36 are European and just three are Asian.

This new fund will have about 40 to 80 stocks, with Europe the biggest weighting at 38 per cent and North America at 27 per cent.

In terms of themes, the most prominent is demographics at 39 per cent and aspirational spending at 37 per cent. The fund will be investing with a clear, focused approach in areas that are easily understandable and in which the manager has high conviction.

Stock markets may be facing a long period of stasis for the major indices; therefore finding the growth opportunities for the next few years is going to be increasingly important. In previous articles, I have covered infrastructure and energy as long-term themes; I believe the new JPM Global Consumer Trends Fund could be a strong contender to sit alongside them.

Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information about the funds included in this column, visit

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Suggested Topics
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions