Six months on from the crash: Winners and losers

5 min read 21 Sep 20

Summary: The impact of the coronavirus pandemic continues to reverberate around the global economy. Despite unprecedented support from governments and central banks, there can be no guarantee that economies will recover and avoid a protracted downturn.

Pessimism can be easily overdone, and it is perhaps heartening that many companies have been able to succeed during 2020, in the face of the sharpest global economic contraction since the Great Depression.

Looking back on the six months since global stockmarkets crashed in March 2020, it is clear that certain sectors of the economy have thrived while others have suffered. Here, we have explored some of the principal ‘winners’ and ‘losers’ during this tumultuous period.

The winners


The obvious winners during this period have been technology companies, whose services have been indispensable for millions of businesses and households through lockdown. With people confined to their homes, they have embraced working from home, online streaming and online shopping.

The dominant group of US technology giants often referred to as the FAANGs – being Facebook, Apple, Amazon, Netflix, and Google (whose parent group is called Alphabet) – plus Microsoft, have continued to report strong growth and profit.

Their shares have soared, driving the US stockmarket to all-time highs this summer. From their March 2020 lows, the shares of Amazon, Apple and Facebook had roughly doubled by the end of August. Following this ascent, the technology sector’s share of the S&P 500 Index of the largest US companies’ shares, by value, had risen to almost 30%.


Another sector that has remained resilient during the pandemic has been healthcare. The shares of the world’s largest pharmaceutical, medical equipment and biotechnology companies, as measured by the MSCI World Health Care Index, have rose by 8% (in US dollars) in the year to date, to August 2020.

The resilience of the sector is unsurprising, and not just because of investment to find a vaccine for COVID-19. Although elective surgeries have been postponed by the pandemic, medicines are mostly essential purchases, come rain or shine. As societies age, demand is gradually rising for healthcare products and services, with global spending projected to reach US$8.7 trillion in 2020.

The Losers

Oil and gas

he fortunes have been less rosy for Big Oil. The collapse in global economic activity in early 2020 saw demand for oil and gas slump. The price of a barrel of oil fell from above US$60 at the start of the year to below US$20, before recovering to around US$40.

The share prices of oil and gas companies have in turn been compressed, weighed down by financial losses and write-downs on the value of their recoverable reserves. At the end of August 2020, oil and gas companies accounted for only 7.4% by value of the FTSE All-Share Index of UK-listed shares – down from 10.5% six months earlier.

Travel and tourism

The travel industry has arguably suffered most of all in 2020. Hotel rooms have been empty, cruise ships have been at anchor, and planes have been grounded during pandemic-induced lockdowns.

How and whether different parts of the global travel business will recover remains contested, but the short-term impact has been profound. Tens of millions of jobs have been lost around the world, and businesses have gone under. Many of those that remain have seen their share price collapse.

What about the months ahead?

As we all know, past performance is never a guide to future investment returns. Just because technology stocks have soared over the past six months does not mean they will continue to – nor that their share prices won’t continue their ascent. Conversely, some struggling sectors may be able to launch a rapid recovery, or they may not.

The experience of the pandemic in 2020 teaches us that, as ever, there can be great merit to diversification. It is never prudent to bet your future on any one part of the market. By ensuring that you are invested across a breadth of assets, sectors and geographies, you can reduce the impact of individual disappointments and failures on your portfolio.

Recent market volatility also underlines the importance of taking a long-term approach. In so doing, we can look beyond the immediate crisis and align our investments with structural trends, like sustainability. Indeed, companies that contribute towards a more sustainable future for society and the planet have been most resilient during the market turmoil of 2020.

Ultimately, the short-term prospects for the global economy largely hinge on government policies and how well the pandemic is contained. Rather than speculating on matters beyond our control, investors’ interests may be better served by maintaining a long-term perspective.

Please bear in mind that M&G is unable to give financial advice. The views expressed here should not be taken as a recommendation, advice or forecast.

When you're deciding how to invest, it's important to remember that the value of investments will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.

The value of a fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. Past performance is not a guide to future performance.

By M&G Investments

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