WITH Asia’s elderly population poised to double within four decades, more money is being plowed into preserving wealth than enhancing growth, driving up demand for the region’s bonds that are beating returns on stocks.

The number of Asians 60 or older will exceed 1.25 billion, or 24 percent of the population in 2050 from 10 percent in 2011, according to data compiled by the United Nations.

That helps explain the surge in pension-fund assets and shows why the region’s emerging-market debt returned 63 percent in the five years through 2011, according to a JPMorgan Chase & Co. index. The MSCI Asia-Pacific Index of shares excluding Japan gained 17 percent in that period.

While the bond rally drove down sovereign yields, it is also forcing insurers to seek higher returns in riskier debt across Asia, according to Cathay Life Insurance Co. (2805), Taiwan’s largest, and Singapore’s NTUC Income Cooperative Ltd. The elderly typically reduce risk to retirement savings by limiting holdings of equities needed to help fund Asia’s economic growth.

“The graying population will matter,” said Thiam Wooi Lye, a senior manager who helps manage $20 billion at NTUC, Singapore’s third-largest insurer. “The returns on equity won’t compensate for the liabilities from pensioners. They will increase allocations to bonds.”

Pension-fund assets in South Korea will almost triple to 1,919 trillion won ($1.7 trillion) by 2020 from 2011’s 746 trillion won, according to Son Seong Dong, the head of a Seoul-based pension research body established by Mirae Asset Financial Group, which controls South Korea’s biggest mutual fund with $55 billion in assets.

Investors over 50 prefer bonds’ fixed payments, as “prudence trumps desire,” Singapore-based Volatility Research & Trading Ltd. wrote in a January 15 report. In South Korea, there are now 1.2 people aged over 50 for every person between 35 and 49, the part of the population that favors stocks, the company said. The ratio will climb to 3.6 by 2046.

Taiwan will have 413 people aged over 65 for every 100 under 15 by 2050, compared with Japan’s 339, according to the Council for Economic Planning and Development in Taipei.

About 38 percent of Singapore’s population will be older than 60 by 2050, up from 12 percent in 2005, UN data show. After expanding 2.5 percent a year for the past three decades, China’s working-age population has stopped growing and will contract 1 percent a year by the mid-2020s, according to the Center for Strategic and International Studies in Washington.