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As the U.S. Gets Older, Some ETFs Bet on Aging in Place -- Journal Report

The Wall Street Journal · 01/06/2023 12:00

By Bailey McCann

Call them exchange-traded funds for the graying of America.

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.

It should come as no surprise, then, that there is a group of ETFs focused on the aging theme.

Hartford Funds recently launched Hartford Longevity Economy ETF (HLGE). The ETF tracks the Hartford Longevity Economy Index, an index 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%.

Given the various themes included in the index, the holdings are a bit of a combo platter. They include pharmaceutical companies such as Merck & Co. and Pfizer Inc. but also technology companies like Hewlett Packard Enterprise Co. and entertainment companies like World Wrestling Entertainment Inc.

Thematic issuer Global X also has a fund focused on longevity. 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 top holdings for AGNG are more strictly health-focused than HLGE. They include companies such as biotech firm Amgen Inc., plus pharmaceutical companies such as Regeneron Pharmaceuticals Inc. and AstraZeneca PLC. It also offers exposure to health-tech companies such as Boston Scientific Corp. and Medtronic PLC.

BlackRock's iShares Ageing Population Ucits ETF (AGED) offers a global play on the longevity theme. The fund invests in developed and emerging-markets companies focused on aging. The fund's expense ratio is 0.40%.

This fund includes exposure to healthcare, financials, consumer discretionary, consumer staples, real estate and industrials, with the biggest weighting going to healthcare and financials. Its healthcare investments tend to be more futuristic, with positions in companies like biotech company Sarepta Therapeutics Inc., which is working on genetic medicine. The financials investments tend toward firms with big wealth-management arms like Charles Schwab Corp.

Investors seeking a lower-cost ETF might look at Vanguard Health Care (VHT). VHT is thematic in the sense that it is focused on healthcare, but the index it tracks -- the MSCI US IMI Health Care 25/50 index -- is a much larger all-cap index of all kinds of healthcare companies. VHT will give investors exposure to all the healthcare companies in the thematic funds, but in a less concentrated way and without exposure to other sectors like technology or entertainment. The expense ratio for VHT is much lower at 0.10%.

Ms. McCann is a writer in New York. She can be reached at reports@wsj.com.

(END) Dow Jones Newswires

January 06, 2023 12:00 ET (17:00 GMT)

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