ASX 200: best and worst stock performers in COVID-19 pandemic
Australia’s sharemarket has taken a hit but not all stocks have dived. See the highest and lowest earners and eight you should consider.
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Recovery from this year’s COVID-19 sharemarket plunge is likely to take far longer than most investors and super fund members hoped for.
Six months after Aussie shares tumbled more than 37 per cent in just four weeks from late February, they have clawed back almost two-thirds of those losses – and there have been big winners and losers from the pandemic.
The outlook is cloudy as we head into the traditionally scary months of September and October, and share specialists say a full market recovery back to February’s record highs could take two or three years.
Looking at the best and worst performers on the Australian Securities Exchange over the past year – taking in the COVID plunge and rebound – paints a clear picture of the virus’s impact.
Among the top performers are gold stocks benefiting from record prices, online retail and payments companies, while tourism, travel, advertising and media have struggled.
Investment newsletter Marcustoday.com.au’s chief operations officer, Chris Conway, said the past six months had been a “wild ride” for stocks and investors.
He said technology, healthcare and some sectors of retail had been the biggest winners, but many people who had kept holding the stocks they always did had not done well.
“Look at Myer and Kogan,” Mr Conway said. “Both sell a suite of products, one sells in a store and one sells online, one is diving and one is flying.”
Mr Conway said government stimulus had strongly supported the sharemarket.
“There’s lots of risks, but there’s also opportunity,” he said.
Mr Conway said the market’s full recovery “might take another two years” amid the current economic backdrop.
Shaw & Partners senior investment adviser Jed Richards said his best guess for a full recovery was two to three years.
“Be selective in this environment – what you avoid is just as important as what you buy,” he said.
“Some industries have been slaughtered while others have resilient and enjoying the government stimulus.”
Mr Richards said online retailers were previously stealing market share from traditional retailers but COVID-19 had given them a “steroid boost”.
“With JobKeeper a lot of people ended up with $1500 a fortnight and thought that is perfect to upgrade the telly.”
Mr Richards said bank shares had been a standout disappointment during the pandemic, losing market share to fintech competitors such as buy now, pay later companies.
“For banks to thrive you need a growing economy,” he said.
Mining stocks – especially gold and iron ore – were big winners.
“Resources have had a golden period – their cash flow at the moment is brilliant but it will come to an end,” Mr Richards said. “The iron ore price will slip back.”
For many investors, Australia’s sharemarket has taken a back seat to global tech giants such as Apple, Netflix and Amazon booming since COVID struck.
This had prompted warnings by some analysts that they were ridiculously overpriced, but Mr Richards said this argument was based on them being US stocks in a struggling US economy.
“But they are not US stocks,” he said. “They are global stocks and are selling products right across the world.”
Ausbil Investment Management founder Paul Xiradis said he expected a general improvement in the sharemarket over the next 12 to 18 months.
“There’s potential for the recovery to really accelerate if there is an announcement later this year of an effective vaccine being approved or produced,” he said.
“That would give hope that we are past the worst.
“The fact is we have got interest rates at close to zero, and people need to generate income is some way, shape or form.
“The risk of all of this is that we don’t find a vaccine or it just takes longer to resolve COVID.”
The ASX Australian Investor Study 2020, released on Wednesday, says there 6.6 million people own shares directly, and COVID-19 has prompted many to focus more on diversification and risk management.
Millions more hold shares indirectly through their superannuation funds.
“If you got in at the low point you would have a pretty big smile on your face,” Mr Xiradis said.
He said real estate investment trusts, popular among investors, had delivered mixed results, with those related to traditional retail and office space struggling while anything involved with warehousing, logistics or data centres was performing well.
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Jessi Roberts had been thinking about investing in shares for a while before the sharp falls six months ago spurred her into action.
“I had done a bit of research, and I saw the sharemarket dropping as an opportunity I couldn’t resist,” said Ms Roberts, 31.
Her move has paid off, and her portfolio of stocks including BHP, CSL, JB Hi-Fi, REA Group, Coles and Wesfarmers has done well in recent months.
However, she understands shares are volatile and her portfolio may sink at any time.
“I’m getting it for the long-term and looking to the future – it’s not a short-term fix and looking to make a quick buck,” Ms Roberts said.
“I’m quite comfortable if it goes down again.”
Ms Roberts said she had planned to contribute extra cash to her share portfolio monthly and had already upped the amount “because I can see results”.
Originally published as ASX 200: best and worst stock performers in COVID-19 pandemic