We look at how to profit from the UK's expanding population.
Since 2001, ONS figures show that 2.2 million more people have settled in the UK than have left the country -- and this trend looks set to continue. Its current forecast is for the population to increase from 62.3m in 2010 to 73.2m by 2035.
Not all of this increase will be down to immigration -- 56% of the increase will be due to births exceeding deaths.
The UK's birth rate has also risen in recent years, thanks in part to a higher birth rate among immigrants than among the native UK population.
I believe we should thank newcomers to the UK for helping to provide a new generation of young workers for the future, but this does mean that even if the government succeeds in slowing net migration, the population will continue to rise steadily for many more years.
Macro investing, Peter Lynch-style
Legendary investor Peter Lynch advised investors to "use what you already know" to select winning companies to invest in. As UK residents, we have an insider advantage when considering which companies will benefit from the UK's growing population.
In most cases, they are companies we see or deal with every week; companies who provide essential services to each of us and to the public-sector organisations we all deal with.
Ten population growth shares
Choosing good companies that deliver life's essentials is not as hard as you might think. All but one of the companies I've chosen is listed in the FTSE 100, and all have a long history of dividend payment and earnings growth.
Here are my 10 recommendations for a long-term population growth portfolio:
Source: Digital Look
These big cap names are stalwarts of British life and yet collectively, they cost less and offer more income more than the FTSE 100 average.
Most of my choices are probably self-explanatory, but its worth noting that Warren Buffett owns 5% of Tesco, Aviva is in Stephen Bland's value portfolio, BT profits from both its customers and its competitors and the police outsource a lot of work to G4S.
I reckon that this portfolio should deliver as the population grows and would also make a good foundation for a long-term buy-and-hold (and forget) portfolio.
It offers good growth potential and. at today's low price-to-earnings ratios, would deliver an inflation-beating income of 4.76%, assuming your money was evenly divided up between each company.
Of course, this portfolio could easily be tweaked to suit your preferences or predictions. Let me know what you think in the comments below.
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More from Roland Head:
> The Motley Fool owns shares in GlaxoSmithKline and Tesco.