The coronavirus pandemic is not over yet, but in many countries, the general belief is that the worst is behind us. Economies around the world are slowly reopening and many of the industries that have suffered from the pandemic are recovering. While some sectors, such as travel and leisure, took a tremendous hit during the pandemic, other sectors, such as gaming, streaming video and food delivery actually benefitted from the crisis.
Find out how you can invest in new trends
Your capital is at risk.
The global economy and financial markets were impacted across the board, and it seems that no industry was spared. Be it positive or negative, it is safe to assume that nearly every aspect of our lives will be forever changed by the COVID-19 outbreak.
Perhaps the most significant change will have to do with remote employment. Recent trends in technology, such as smart cities, hyperconnectivity and mobility now have a new addition: The Work-From-Home (WFH) Revolution.
Coming out of Lockdown
Half of 2020 is over and it was a devastating 6-month period. And yet, it seems that the lockdown measures implemented by numerous countries have been successful. Countries are reporting declining numbers of new COVID-19 patients and lockdown measures are being lifted. Throughout the crisis, investors were keen on locating value and identifying the market segments that are benefitting, or stand to benefit in the future. Now, the objective of many investors is to understand how different sectors have changed and try to find the next investment trends.
The Gaming Industry
For video gamers, passing the time during the lockdown was not that difficult. Many of them are used to playing hours on end and were just given more time to do so. Moreover, the gaming community undoubtedly added some new members during the lockdown, as even the World Health Organization recommended gaming as a way to pass the time.
The gaming industry was on the rise even before the pandemic started, and has established itself as one of the most profitable segments of entertainment, surpassing the music and film industries. Now, the post-coronavirus world has more gamers who joined because of the lockdown, but many of them are likely to remain consumers.
For example, at the time of writing, Logitech is up 33.22% since February 19, 2020. These gains are due in part to surprise increases of 16.34% in EPS and 7.35% in revenue reported as part of the company’s latest earnings report. Another example is popular casual game developer Zynga, which rose nearly 30% over the same time period, due in part to its new partnership with Amazon aimed at offering content to Prime subscribers.
Therefore, it is no surprise that gaming has also become a popular investment theme. eToro’s InTheGame portfolio gives investors exposure to this booming industry with a diversified investment strategy.
eCommerce
Just because people were under lockdown, does not mean they stopped shopping. With a smartphone in every pocket and numerous online shopping options, online commerce was popping during the pandemic. From essentials such as dry foods and produce, to luxury items and electronics, online shopping today has everything available at anyone’s fingertips.
A prime example is Amazon (pun intended). During a time in which its fellow tech giants were struggling to maintain their business, the retail giant was struggling to meet demand. While most companies in the US were furloughing employees, Amazon was hiring. As the largest eCommerce company in the world, the trillion-dollar mammoth could be seen as a yardstick of the industry, showing that it, too, benefitted from the lockdown.
Other examples include online retailer Overstock, which was up a whopping 143.86% since February following a better-than-expected earnings report, and furniture provider Wayfair, which skyrocketed 113.85% over the same period.
The ShoppingCart Smart Portfolio on eToro gives investors a solid investment product, which enables them to invest in the eCommerce industry. Alongside obvious stocks, such as Amazon and Alibaba, the portfolio also offers exposure to smaller players, such as the aforementioned OverStock and WayFair. The ShoppingCart Smart Portfolio showed double-digit gains both in April and May of 2020 and, as of the time of writing, is up 70% for Q2, 2020.
Food Delivery
A subsector of eCommerce, online food ordering has made its way from niche to norm, to a leading solution. During the COVID-19 crisis, millions around the world took advantage of online food delivery platforms for both grocery shopping and dining in.
Contemporary smartphone and GPS technologies have enabled the creation of courier services, which operate in cooperation with restaurants. Solutions such as Uber Eats, GrubHub, Takeaway.com and Meituan Dianping have become the go-to apps for people wanting to satisfy a certain culinary craving, but who cannot leave their homes.
This was apparent in several of the stocks in the sector. Online meal kit delivery service Blue Apron jumped 187.78% since February 19, 2020 and UK-based grocery delivery giant Ocado popped 77.55%.
While it may intuitively be perceived as a low-tech segment, food delivery is today so technology reliant, it is definitely a part of the larger foodtech industry (read more here). The investment philosophy behind eToro’s FoodTech portfolio examines the global drivers that are changing the food industry. With this perspective, online delivery is seen as a segment that represents the change in consumer behaviour and tastes in the food industry.
Biotechnology
When a pandemic strikes so hard and so fast, it is only logical that the giants of the pharma and biotech industries will try and rise up against it — and COVID-19 is no exception. Numerous companies around the world, from small startups to the largest pharma conglomerates, began racing to develop a vaccine or other effective treatment.
Among the scientific fields exploring possible solutions for the coronavirus is CRISPR. The innovative gene-editing method, which is said to be a potential cure for everything from HIV to ALS, is also currently being studied as a possible coronavirus treatment.
CRISPR-focused biotech company Regeneron climbed 51.84% since February, as it has harnessed its velocisuite technology to track and record the pandemic.
This technology is quite novel (you can read more about it here), and the biotech industry has great faith in its potential. On eToro, you can invest in the companies studying and using this innovative technology through the CRISPR-Tech Smart Portfolio.
5G Technology
The coronavirus pandemic was a significant test of contemporary society’s ability to function remotely. From social networks to smartphone communication to video conferencing, the Internet was pushed to its limits. Moreover, numerous companies around the world have utilised remote work practices, and some have even said they will maintain these practices throughout at least the rest of 2020.
In effect, the COVID-19 pandemic may have altered the way businesses operate forever, by normalising remote positions, and this will require a complete readjustment of remote practices. This is where 5G comes into play. The next generation of high-speed, wireless communication is already being deployed and is set to significantly improve almost every aspect of digital communication — including enabling more people to work remotely.
Marvell, a leading player in 5G technology has climbed 39.54% in less than four months. The company reported better-than-expected quarterly results at the end of May.
Smartphone internet access, Internet of Things (IoT), streaming video and gaming, as well as driverless cars are just a few of the technologies that will be improved, or enabled by 5G. Investors who believe in the current investment conditions for 5G technology could look into the 5GRevolution portfolio on Toro.
Making an Investment Decision After Coronavirus
Indeed, equity markets took a significant tumble during the coronavirus crisis. Many global supply chains were brought to a halt and the series of virus-related market events took its toll on numerous companies. However, the crisis has also served as a catalyst for present and future economic growth. Both private investors and financial institutions are now studying the current market conditions, trying to locate the segments that will show sustainable growth. As always, investors should be extremely cautious when deciding on their next investment, however, the segments mentioned above may be a good place to begin for those looking for an entry point into long-term investment.
Smart Portfolios is an investment management service provided by eToro Europe Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Smart Portfolios™ should not be considered as exchange-traded funds, nor as hedge funds.
Your capital is at risk.
All data is accurate as of 10/6/20.
Zero commission is available to clients of eToro (Europe) Ltd., eToro (UK) Ltd. and eToro AUS Capital Limited (AFSL 491139).
For clients of eToro AUS, only stocks traded on US stock exchanges are available as underlying assets and with no commission. These stocks are offered through eToro Service (ARSN 637 489 466), operated by eToro Asset Management Limited ABN 51 122 005 396 AFSL 319 738, and promoted by eToro AUS Capital Limited CAR 001281634. Refer to our FSG and PDS before deciding whether to trade with us. All other stocks are offered as derivatives and bear commission.
Zero commission does not apply to short or leveraged positions. Zero commission means that no broker fee will be charged when opening or closing the position. Other fees may apply. For additional information regarding fees, click here. Your capital is at risk.