“Forever young” was one of the great pop classics of the 1980s. While this song by the German band Alphaville was less about the desire for eternal youth than the threat posed at the time by the Cold War, when they hear the hit published 40 years ago many listeners are likely to reminisce about their youth and long for a return to those days. “Forever young” – these words go far beyond the music and the daydreams associated with it. An entire sector of industry is now addressing the question of how to achieve a life that is as long and healthy as possible. Longevity is increasingly emerging as a global mega-trend. Part of the sector is devoted to products and services aimed at increasing the chances of reaching a great age through the early adoption of a healthy lifestyle. Another segment contains companies whose strategies are targeted directly at improving life expectancy.
The second of these is the focus of the new Solactive Longevity Index. This stock market barometer represents companies that are among the potential beneficiaries of a world that is populated by more and more older people. The index’s selection universe includes the economic sectors of genomics, medical technology & robotic surgery, telemedicine & accessible healthcare, medical imaging and age-related diseases. From a regional perspective, only companies from developed economies are eligible for inclusion. They must also have a market capitalisation of at least USDmn 100 and an average daily trading volume of at least USDmn 3 over a period of three months.
The investment universe is first sifted with ARTIS®, a language-based algorithm. In the next step, every company identified is given a score that reflects its affiliation to the sectors of industry already mentioned. Every single company is then analysed again to ensure that it actually fits the theme of the index. The remaining shares are allocated to the stated sectors and the final selection is made on the basis of the score achieved. Up to 30 shares can be included in the Solactive Longevity Index. Its composition is reviewed every six months, followed ten days later by a rebalancing in which the stocks are given the same weighting.
There are 30 companies in the starting line-up of the Solactive Longevity Index. These include both well-known large caps and some smaller listed companies. Among the smaller ones is Crispr Therapeutics. The Zug-based biotech firm specialises in gene editing and has been collaborating with Vertex Pharmaceuticals, an industry heavyweight also featured in the index, for a number of years. Illnesses related to age are among the core areas of expertise of Eli Lilly. At the end of 2023, the pharmaceuticals group entered into a partnership with Fauna Bio worth almost USDmn 500. This company uses artificial intelligence (AI) to analyse data from people and mammals for the development of drugs. Eli Lilly would like to use this method to research preparations to combat obesity, regarded as a key determining factor in longevity, which is why Novo Nordisk has made it into the Solactive Longevity Index. The Scandinavians have a real blockbuster in their armoury with the weight-loss drug Wegovy.
Leonteq has launched an ETP+ to enable investment in the new themed index. The product tracks the underlying without any term limit and can be traded on the SIX Swiss Exchange and the BX Swiss. In addition to direct participation in the Solactive Longevity Index, investors can thus be confident of high liquidity in stock market trading. The structure of the Exchange Traded Product (ETP) also comes with a “+” in benefits, as Leonteq deposits a pledge with SIX SIS AG for every ETP+. The depositary agent ensures that investors have access to these funds in the event of the issuer becoming insolvent. Measures are also taken to ensure that the collateral is sufficiently large: SIX Repo AG undertakes a daily review and valuation of the securities. Despite this robust structure, the ETP+ comes with an administration charge of just 0.50% p.a. Investors can choose between CHF and USD as the trading currency. Please note that there is no currency hedging for either of these options.
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