In contrast, in the U.S., the percent of the population under 15 is 1.5 times that of the percentage over 65. This is still much better than any other developed country, notably Japan where the ratio is 0.5-to-1, or the old outnumber the young two to one. The Eurozone has a 0.90 ratio of under 15 to over 65.
Without a surge in productivity through technological advances or a major shift in immigration policy, Koesterich projects a steady decline in productivity from developed countries. As such, he suggests that investors should allocate more toward younger emerging markets to help mitigate the impact of aging populations.
Country-specific ETFs that follow young economies include:
- iShares MSCI Brazil Index Fund ETF (NYSEArca: EWZ)
- iShares MSCI Mexico Index Fund ETF (NYSEArca: EWW)
- iShares MSCI Philippines Investable Market Index Fund ETF (NYSEArca: EPHE)
- WisdomTree India Earnings Fund ETF (NYSEArca: EPI)
- Market Vectors Indonesia Index ETF (NYSEArca: IDX)
For more information on developing economies, visit our emerging markets category.
Max Chen contributed to this article.