Emerging market demand for healthcare products and services makes this area attractive for equity investors, argues the manager of the JP Morgan Global Consumer Trends Fund, a UK-registered vehicle.

By the middle of the current decade, strong emerging markets will account for 70 per cent of the growth in demand for pharmaceutical products, with China investing £125 billion (around $195.2 billion) on healthcare by 2011, the fund says.

With ageing populations in the West driving demand for healthcare, and rising living standards elsewhere driving greater demand for this sector, “health and wellbeing” is seen as an investment hotspot.

Peter Kirkman, manager of the fund, will hope that a correct prediction about the healthcare sector will enable him to build on what has already been a strong performance by the fund since it was launched in April 2008. Since then it has returned 43 per cent, outperforming global equity markets by 37 per cent.

“Growth for the healthcare sector is shifting eastwards. Not only is there a growing population to look after but there is also a lot of catching up to do in terms of understanding the relationship between healthcare spending and productivity,” said Kirkman.

In an investment note, Kirkman said that pharmaceutical consumption growth outstrips per capita gross domestic product growth. Chinese GDP has grown around 10 per cent in recent years whilst pharmaceutical spend growth has been 25-30 per cent a year.

Pharma companies are also benefiting from the changing patient-needs in emerging markets, said Kirkman. For example, Sanofi-Aventis is a major diabetes drug manufacturer and has 30 per cent of its custom coming from emerging markets as diabetes becomes a growing problem there. In Russia, for example, 45 million people have dyslipidemia which is caused by too much cholesterol in blood.

“Investors can tap into the emerging market healthcare boom by investing in Western pharmaceutical brands who are active in emerging markets. Stocks like GlaxoSmithKline, for example, have high EM exposure with 16 per cent of their total sales for the first nine months of 2010 coming from the region,” added Kirkman.

The fund is relatively small, with assets under management of £65.1 million at the end of last November (source: Trustnet). It carries an initial charge of 4.25 per cent and an annual fee of 1.5 per cent. The fund is classified within the Global Growth sector.