Strategic time for tech and biotech
With the current volatility, now is the best time to look for stocks or exchange traded funds (ETFs) that are helping keep what’s left of the economy running, like technology and biotech.
Kris Walesby, ETF Securities chief executive, said internet providers, web conferencing, mobile, social media and online shopping stocks were the best examples.
“Netflix has had subscription spike in areas particularly hard hit by COVID-19, while Amazon has actually had to hire more people to manage their warehouses to cope with increased demand for delivery,” Walesby said.
“Netflix has also trialled a function to allow ‘Netflix parties’ which is an excellent opportunity to battle social isolation.
“Biotechnology companies globally are racing for the solution – it’s a bit of a lottery as to who will manage first – but worth noting the following: Moderna started clinical trials on a vaccine this week and Gilead’s anti-viral medications are looking promising as treatments.”
Biotech had previously been considered a volatile sector but was more valuable in the current environment.
“It’s fair to say in our increasingly global world, COVID-19 is not going to be the last time we have to take drastic measures to limit the spread of a pandemic virus and these companies have been positioned to step up quickly because of their ongoing work,” Walesby said.
Walesby shared a few other tips: “Generally agreed lessons from this period for investors include: 1. don’t sell quality assets in panic and at unreasonably low levels; 2. don’t try and pick the bottom; 3. consider slowly accumulating good assets at attractive prices and getting oneself positioned for the recovery, whenever it may come.”
AUTHOR
Chris Dastoor
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
