Efforts to tackle obesity will form an important investment theme for fund managers in coming decades, according to a BofA Merrill Lynch Global Research report. Globesity: The Global Fight Against Obesity identifies an investment “megatrend” with a shelf life of 25 to 50 years. BofA Merrill Lynch has created a related stock list centering on four areas: Pharmaceuticals and Healthcare; Food; Commercial Weight Loss, Diet Management and Nutrition; and Sports Apparel and Equipment. According to the report, the costs of managing obesity are much greater than previously believed. In May 2012, the U.S. Institute of Medicine estimated the annual cost of obesity-related illness in the United States at more than $190 billion, equal to 21% of annual medical spending. Previous studies estimated 10%. Treating obese patients comes at a higher premium than treating smokers: Obesity adds 50% to annual medical costs, while smoking adds 20%.
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